Global Prices of n-Butanol and Iso-Butanol Set to Surge Amidst Feedstock and OQ Chemicals' Price Hikes

Rotterdam (The Netherlands): Prices of n-Butanol and Iso-Butanol are expected to globally increase due to expected increments in the prices of feedstock Propylene and the recent price hike initiated by OQ Chemicals, a leading manufacturer of oxo-alcohols, on February 15, 2024, effective from March 1, 2024, for the Asian and European markets.

On February 15, 2024, OQ Chemicals, a leading manufacturer of n-Butanol and Iso-Butanol, announced a price hike of 100 EUR/MT and 110 USD/MT for the European and Asian markets, respectively.

In terms of production costs, prices of feedstock Propylene (Chemical Grade) were recorded to have been stable across the North American market but have been surging throughout February 2024 across the Asian and European markets, further adding volatility across the global n-Butanol and Iso-Butanol market.

In terms of supplies of n-Butanol and Iso Butanol, the Asian market continued to experience costly imports of feedstock Propylene (Chemical Grade) from the Saudi Arabian market while the European market continued to experience expensive shipments from the exporting US market because of inflated freight charges due to the ongoing crisis at the Red Sea, contributing to increments in the prices of n-Butanol and Iso-Butanol.

Overall, demand for n-Butanol and Iso-Butanol continued to remain subdued in the European and Asian markets due to the underperformance of the construction industry, resulting in weakening demand for n-Butanol and Iso-Butanol from the paints and coatings industry.

Across the European market, the underperformance of the construction sector extended into February with expectations of not recovering in March 2024. Sub-contractor availability improved for the thirteenth consecutive month with job shedding being expected to extend into March 2024. Major real estate firms noted further decrements in the influx of new orders completed with increasing input costs for construction materials (including n-Butanol and Iso Butanol for paints and coating), with the outlook being mostly pessimistic. The underperformance of the construction sector continued to be centered around housebuilding segments, which was the worst-performing sector in February 2024, with civil engineering and commercial building activities also witnessing significant contractions.

Across the North American market, demand for n-Butanol and Iso-Butanol mainly originated from improvements in the housebuilding and commercial building activities, mainly driven by the perennial shortage of secondhand homes and increased renovations across hotels in major metropolitan cities. Mortgage rates were recorded to also have further increased, with current mortgage rates being at 6.9% for a 30-year fixed term and 6.29% for a 15-year fixed term, mainly driven by incoming demand from the spring months.

Across the Asian market, demand for n-Butanol and Iso-Butanol from the construction sector was recorded to have improved due to renovation activities being witnessed owing to the festive Lunar New Year. Moreover, improvements in the construction were also witnessed as major South Korean and Japanese construction firms continued to repay foreign loans and initiated new projects in South Korea and Japan.