November 2024: THF prices Stabilize in Europe, Consumption Reduced from Asia

The European market had continued to witness the stagnancy in the Tetrahydrofuran (THF) prices during November 2024 as the manufacturers were able to maintain the balance between the supply volume and the demand outlook for the same in the domestic market.  A crucial solvent in the polymer industry, THF is highly valued for its ability to dissolve polyolefins, polyesters, and polystyrenes, supporting its widespread use in polymer characterization, sample preparation, and synthesis.

Despite its critical role, market trends have shown a softening in THF prices. The stationary behaviour is attributed to several factors, including the reduced cost of Butanediol, the primary feedstock for THF production. Butanediol prices have remained on the softer end of the scale in domestic markets, helping to ease overall production costs. Additionally, external influences such as energy expenses, operational efficiencies, and supply chain stability have further impacted the pricing landscape.

The European market have also witnessed a decline in the exports of Spandex to the Asian market such as China, Bangladesh, Indonesia and others. These markets have increased their domestic production proportionally declining the demand volume for spandex from Europe and reducing THF consumption in the region.

With the demand outlook softening and inventories stabilized, market players are now focusing on recalibrating production levels to align with current consumption trends. While THF remains a cornerstone of the polymer industry, the recent price movements highlight the delicate balance between feedstock availability, market demand, and operational strategies.

Business activity in the Eurozone experienced an unexpectedly steep decline this month, marked by a contraction in the services sector and a deeper recession in manufacturing. Both manufacturing and services faced renewed weakening in new business, with export orders particularly affected as the Eurozone economy continues to grapple with subdued international demand.

Weak THF domestic demand, robust local production, and unfavourable arbitrage economics for European and Asian refiners have significantly impacted trade flows. Shipments from Europe to the U.S. Northeast reached a historic low, while Asian imports dropped by half compared to the previous year, driven by increased regional demand following refinery outages in the Middle East and Southeast Asia. Although U.S. gasoline inventories remain below the five-year average, domestic supplies, including record-high shipments from the Gulf Coast to the East Coast, have diminished the need for imports.

As per ChemAnalyst, THF prices in the domestic market are projected to experience slight variations, driven by stable demand from end-use manufacturing sectors. Despite prevailing economic challenges, the steady consumption from these facilities is likely to support relative price stability. This trend underscores the THF market's resilience amid broader economic uncertainties.