Raffinate Prices Decline Globally Amid Weak Demand and Economic Outlook

The prices of Raffinate as of July 2023 in the global market have shown bearish market trends. These trends can be explained using different market dynamics. As in the US, this development can be explained due to weak demand from Methyl tert-butyl ether and Methyl ethyl ketone. Moreover, in Europe, this development is primarily instigated due to declining prices of crude oil amid weak downstream demand. As there was a demand problem globally due to a weak economic outlook, there were similar markets in the global Raffinate market.

The prices of Raffinate in the US market have shown bearish market trends as of this month. This trend can be justified by declining demand from downstream industries like MTBE and MEK. In Addition, the US Fed Reserve decided to raise the interest rate from 5.25% to 5.5%, which created negative market sentiments and curbed the purchasing power of end-stream industry consumers. Furthermore, weak cost support from Natural Gas led to a decrement in the production cost.

In the European market, the prices of Raffinate have reduced. This Raffinate market change can be explained by weak demand pressure from the downstream MEK industry amid high inventory levels in the market. Furthermore, the prices of Crude oil and Natural gas were unsteady due to the war in Ukraine, which led to an extraordinary rise  of Raffinate in the prices, but now feedstock Crude and Natural Gas prices are returning to their traditional value on the backdrop of increased supply in the market. Furthermore, the high-interest rate, which was stated at 4.25%, created negative market sentiments.

In Addition, in the Chinese market, the prices of Raffinate declined slightly as of this month. This market development was caused due to significant decline in the demand from the downstream MEK and MTBE industries. Moreover, Crude Oil prices were reduced due to a weak Chinese economic outlook which outweighed the jolt due to the product cut announcement of OPEC+ as there was a demand problem in China as demand from the international and domestic markets was low on the backdrop of the weak economic outlook and global economic uncertainty.

As per ChemAnalyst Database, ‘It is expected the prices of Raffinate in the US is likely to increment in upcoming months as the prices of feedstock Crude Oil hike as production cuts would appear to kick in. In Addition, there is likely the expectation of a stable interest rate which is supposed to create positive market sentiments. Furthermore, in the European market, despite increasing demand from the downstream industry like MEK and MTBE, the prices of Raffinate are likely increment.’