The global n-Butanol market has entered 2025 facing a challenging landscape, with price declines in the US and subdued demand in key markets like Europe and Asia, signaling a potential slowdown in the coming months. A mix of geopolitical issues, regulatory changes, and seasonal disruptions continues to complicate the market dynamics of n-Butanol.

In the US, n-Butanol prices have fallen to historically low levels, as export conditions remain unfavorable. Despite a 7% increase in chemical railcar loadings, with a total of 35,174 railcars reported for the week ending December 21, 2024, most of the exports are being diverted to Canada. This comes in the wake of a decree issued by Mexico’s president on October 23, 2024, that temporarily restricts imports of more than 60 chemicals, including n-Butanol. The decree, effective from October 24, has largely frozen US export opportunities, further pressuring US n-Butanol suppliers.

Domestic demand for n-Butanol in the US also remains bleak, especially from the paints and coatings sector, as construction spending stagnated through November 2024, with data for December 2024 still pending at the time of writing. Further compounding the market's woes, supply chain disruptions continue to plague warehouses across Houston, which are overflowing with n-Butanol inventory due to a severe shortage of iso-tanks, essential for shipments. As concerns grow over a potential strike on January 15, 2025, suppliers have started pushing large volumes of n-Butanol to avoid transportation disruptions.

Adding to the downward pressure on the US market, the Chinese government has extended its anti-dumping duties on n-Butanol imports from Taiwan, Malaysia, and the US. The Ministry of Commerce confirmed on December 24, 2024, that the anti-dumping measures, first initiated in 2018, will remain in place for another five years, starting December 29, 2024. The continued duties—52.2% to 139.3% on US imports—are expected to limit the US’s access to the critical Chinese market, which has seen an alarming surge in imports by 560%, even as exports plummeted by around 75%. The extension of these tariffs highlights China's strategy to boost domestic production capacity for oxo-alcohols, including n-Butanol, which is struggling to ramp up due to operational issues at new plants.

Over in Europe, n-Butanol prices have stabilized at historically low levels, despite a brief 1.1% rebound in propylene prices at the end of December 2024. However, the European market faces its own set of hurdles, as the arbitrage window to and from the region has largely closed, limiting the possibility of supply shortages. The availability of n-Butanol across the European market remains ample, supported by limited outages and no disruptions, despite the supply of n-Butanol reportedly being the tightest among other oxo-alcohols, namely iso-Butanol and 2-Ethylhexanol. Inland trading activities across Europe also faced challenges, as ports across Northwest Europe continued to face maintenance works, hindering circulation of inventories and leading to a supply glut, resulting in German producers struggling to pass elevated prices of feedstock propylene to customers. Weak demand for n-Butanol was seen spreading to the paints and coatings industries and plasticizers industry including the downstream DBP (Dibutyl Phthalate) industry, due to sluggish automotive demand. Economic uncertainty in Germany, sparked by the fall of the coalition government and upcoming elections in February 2025, further dampens expectations for any near-term recovery in construction and infrastructure projects, further dampening demand for n-Butanol

The news comes as a double blow to European and US manufacturers, with ongoing operational issues plaguing the Chinese market as well. Operating rates of n-Butanol in China has fallen by 4% in January 2025, while suppliers in the Shandong region report an oversupply, with prices seeing only slight adjustments downward up to 50 RMB/ton. However, even as the supply remains plentiful, procurement activity has remained lackluster as demand from downstream industries, especially paints and coatings, shows little sign of improvement

At present prices of n-Butanol across the US market have again fallen by approximately by 1% during the opening week of this year, while remaining stable at historically low levels across the German and Chinese markets.

As the market stumbles, a glimmer of hope emerges with forecasts of price hikes in the coming months. Major US and European n-Butanol manufacturers are expected to increase prices, driven by anticipated increases in production costs. A looming structural reduction in propylene supply due to the closure of LyondellBasell’s Houston refinery in the first quarter of 2025 is expected to drive up production costs and restrict n-Butanol output. This, paired with Nan Ya Plastics’ ongoing maintenance shutdown in Asia, could lead to further tightness in global n-Butanol supply.