Shanghai (China): China experienced a decline in the prices of n-heptane, a solvent extensively employed in formulating paints and coatings for the construction and automobile industries. This drop in n-heptane was attributed to the lack of robust cost support from feedstocks like crude oil and subdued market sentiments leading up to the Spring Festival. The overall low market confidence has resulted in cautious petrochemical restocking in China before the Lunar New Year holiday, as industry participants are hesitant to build up inventory amid uncertainty regarding demand recovery in March. Furthermore, numerous downstream plants in China have either suspended or reduced production since the end of January, with the possibility of not resuming or returning to full capacity operations until the conclusion of February.

The property and construction sectors stand as significant downstream industries for n-heptane. In 2023, the property sector witnessed a 1.3% decline in added value, creating a ripple effect on related industries, including downstream construction. The International Monetary Fund (IMF) projects a substantial 50% drop in new housing demand in China over the next decade due to these developments. Notably, new housing supply and sales for key 30 cities in the country experienced a drastic month-on-month decline of over 40% in January, as reported by the China Real Estate Information Corp (CRIC). The subdued buying enthusiasm and stable demand for n-heptane from importing nations contrasted with western countries, which exhibited lower demand, primarily attributed to the sluggish performance of end-use construction industries. The weak external demand resulted in a 4.6% contraction in China's total shipments in 2023, impacting a key growth pillar that the country considers in its exports. The eurozone construction sector also recorded a significant drop in January, signaling a sharp decline from December that impacted the price of n-heptane. These factors collectively contribute to the challenges faced by n-heptane in the current market scenario.

Dow's Q4 2023 report highlighted a year-on-year decrease in net sales for the downstream Polyurethanes & Construction Chemicals business, primarily attributed to lower prices globally. Sequentially, net sales also declined due to reduced local prices on a global scale. In the petrochemical markets of Asia, a mixed trend was observed ahead of the Lunar New Year holiday, indicating a stagnant market environment and a less optimistic outlook for the industry. The customary extended holiday period for migrant workers, who return to their hometowns during this time, contributes to a subdued market scenario. They typically resume work after the Lantern Festival, scheduled for 24 February this year. Additionally, the price of n-heptane experienced a 0.5% drop in the second week of February, settling at USD 1610/MT FOB Qingdao.

The temporary closure during the Lunar New Year holiday is expected, and factories are anticipated to resume operations after the festivities. As per ChemAnalyst, projections for n-heptane prices in the Chinese market indicate a gradual and steady movement in the first quarter of 2024. This is expected to be supported n-heptane price by enhanced productivity rates and a moderate demand outlook.