Moderate Downstream Demand Governs Tetrahydrofuran Prices in the European Market

The Tetrahydrofuran market in European countries witnessed continuous stagnancy in the price dynamics towards the end of the fifth month of 2023. The downstream (PTMEG and spandex) market showcased a moderate demand outlook and frequent inquiries about Tetrahydrofuran in the European market. Moreover, other fields consuming more Tetrahydrofuran include paints and coating industries. The European market continued to witness a slight slump in the construction sector in the first quarter of 2023, and other microelement factors, such as energy prices, the country’s economic situations, and the demanding availability and capacity of the major manufacturers, to fulfill the demand outlook. On the week ending May 26th, Tetrahydrofuran prices settled at USD 2230 per MT, FOB Hamburg.

The International Monetary Fund (IMF) had already predicted the recession in the country; meanwhile, the country has recently entered a recession showcasing the dip in the GDP. The aftereffects of the economic uncertainty in the German market can be witnessed in the market dynamics and demand-supply chain between the European and overseas markets. With Germany experiencing an economic crisis this year, goods consumption is projected to fall over the upcoming peak season, leading to a worldwide trade downturn.

Consumer spending will continue to fall in the coming months, putting a damper on the height of European demand. As a ripple effect, the Tetrahydrofuran manufacturers faced slower demand from the end-use manufacturing units (paints and spandex) market, proportionally impacting the overall price trend for Tetrahydrofuran in Germany.

Weak consumer demand and GDP growth in Europe may result in lower exports and imports of Tetrahydrofuran, harming export-reliant economies. Amid the current issues posed by growing inflation and a consequent rise in the cost of living, several European countries have seen labor strikes this year, including Germany, France, Belgium, and the Netherlands.

As per ChemAnalyst, Tetrahydrofuran prices are expected to decline slightly in the European market due to a weak demand outlook and lack of inquiry rate in the country. The economic conditions may restrict the buyers from placing new orders, along with slower operational rates in end-use manufacturing units. The feedstock (Butanediol) prices may vary in the upcoming quarter, accompanied by the upstream crude oil prices in the international market.