In late August 2024, n-Butanol prices across Europe were observed to have increased by approximately 1%, largely due to reduced production levels. This price escalation was primarily attributed to a significant constriction in the availability of Propylene, an essential feedstock for n-Butanol production.

The Propylene market experienced substantial strain from reduced imports from the Middle East and North America, compounded by numerous maintenance turnarounds across Europe. Despite Shell Chemicals resuming Propylene production at its Moerdijk facility, with a notable capacity of 510,000 MT/year, the supply difficulties were not fully alleviated. Many producers struggled to secure sufficient Propylene, with only 1 to 2 truckloads available for n-Butanol manufacturing, leading to a continued low production rate of the chemical. This supply constraint was further intensified by a price increase of USD 110/MT announced by OQ Chemicals in late July 2024 for the European market. This announcement led suppliers to accelerate restocking efforts before the new prices took effect, creating a temporary shift in demand conditions for n-Butanol.

Additionally, the European olefins market is expected to face a significant maintenance period from August to November, with five major crackers scheduled for closure. LyondellBasell, BASF, and BP had their crackers shut down in Germany, while MOL Group and Slovnaft closed their facilities in Hungary and Slovakia, respectively, which is keep the production of N-Butanol low during this timeframe. Although these shutdowns were expected to contribute to market stabilization, there was a prevailing lack of optimism regarding substantial improvements in demand fundamentals, keeping the market sentiments of n-Butanol across the European market mostly muted, corroborating to the modest increment in the prices observed.

Spot prices for n-Butanol were driven higher in August 2024, largely due to increased restocking activities. This rise was a response to anticipated shortages and the need to secure supplies before further price adjustments. Despite this, the overall demand for n-Butanol, especially from the downstream paints and coatings sector, remained subdued. This weakness in demand was largely attributable to the sluggish performance of the European construction industry, which significantly impacted the consumption of n-Butanol.

This is further evidenced as in August 2024, a widespread decline in construction activity was reported across all major categories. The housing sector faced the steepest decline, with construction projects slowing considerably and new residential developments being put on hold. Commercial construction, including office and retail spaces, also experienced a notable reduction in activity. Similarly, civil engineering projects, such as infrastructure development and public works, saw significant cutbacks, which kept the demand for n-Butanol low.