In April 2024, the Japanese n-Butanol market experienced a notable uptick, with prices surging by approximately 3.5%. This increase was largely attributed to a combination of heightened construction activities and price adjustments initiated by major oxo-alcohol manufacturers.

The construction sector in Japan displayed promising signs of recovery, witnessing a significant rise in construction starts from February to March 2024, marking an increase of around 9% to reach a total of 64,265 units. Despite the positive momentum, the year-on-year comparison indicated a more tempered growth trajectory, with a decline of approximately 13%. However, there were optimistic indications of a gradual improvement in demand from downstream industries such as paints and coatings, alongside positive trends in automotive manufacturing, which reported a robust growth rate of about 9.6%, thereby improving the demand conditions of n-Butanol.

Concurrently, the surge in n-Butanol prices was complemented by announcements from key producers like OQ Chemicals and Eastman Chemicals, both implementing independent price hikes. OQ Chemicals announced a price increase of roughly USD 110/MT for n-Butanol effective from April 1, 2024, in North America, followed by Eastman Chemicals with hikes announced on March 14 and April 1, 2024, impacting North American markets, with the latter taking effect from April 15, 2024. These adjustments translated into higher costs for imports of n-Butanol in Japan.

Furthermore, the manufacturing site of OQ Chemicals in Oberhausen, Germany, remained under force majeure throughout April due to disruptions in its raw material processing site since February 27, 2024. Operations were anticipated to resume in May 2024, potentially easing supply constraints of n-Butanol in the near future.

In terms of manufacturing activities, manufacturing output experienced another decline in April, marking the 11th consecutive month of contraction. However, the rate of decline was moderate and marked the lowest level recorded since last October, according to the survey. Companies once again indicated a preference for using existing inventories instead of increasing production. Additionally, reports suggested that a lack of new orders had a dampening effect on production. Soft demand and destocking at client levels contributed to a decrease in new orders for the eleventh month in a row. Looking ahead, the trajectory of n-Butanol prices in the Japanese market appears poised for further increases as demand gradually rebounds. Maintenance turnarounds at several Propylene plants in China and Taiwan during April 2024 contributed to Propylene scarcity, thereby driving up production costs for n-Butanol, a product primarily exported to Japan from these regions. Moreover, the support from crude oil prices amid ongoing geopolitical tensions is expected to add pressure on production costs of n-Butanol, further influencing price dynamics in the market.