During the first week of September 2024, n-Heptane prices across the Asia-Pacific (APAC) region showcased stability, continuing the trend of market stagnation seen in previous weeks. This price stability was primarily attributed to subdued demand from downstream industries, such as paints, coatings, adhesives, which have been grappling with ongoing challenges.

Demand for n-Heptane remained weak throughout the APAC region, with the downstream sectors showing little sign of recovery. The construction sector continued to struggle with weak new-home sales and high unsold inventories, further depressing demand for materials like paints and coatings that are critical for construction applications. Property developers, facing market uncertainty, were reluctant to ramp up activities, and this lack of momentum in construction negatively impacted n-Heptane consumption. Similarly, demand from downstream adhesives and coatings sectors remained sluggish, compounding the downward pressure on n-Heptane market. In August, new-home sales from China’s top 100 real estate companies plummeted by 22% year-on-year, accelerating the market downturn.  Despite the stagnant demand, supply remained sufficient, with ample inventories reported in key markets like China and India. While earlier in the year, traders had expressed concerns over shipping delays and logistical challenges, these issues have largely eased, allowing for a stable supply chain. However, the excess inventory from earlier production expansions in the region has prevented any significant upward movement in prices, leaving the market in a state of equilibrium.

Upstream, crude oil prices held at a 14-month low, further limiting cost support for n-Heptane. Concerns over declining demand in the U.S. and China, coupled with expectations of increased output from Libya, weighed on crude oil prices, opposing the potential for any substantial feedstock cost increases. This, in turn, kept naphtha prices – a key feedstock for n-Heptane production – subdued, maintaining low production costs for n-Heptane manufacturers. The delay in OPEC+ output increases, along with a sharp withdrawal from U.S. oil inventories, provided only minimal upward pressure on energy markets.

In India, n-Heptane prices also remained stable for the week ending September 6, 2024. Market participants reported cautious procurement activities and steady inventory levels, which helped maintain price stability. Further, Freight rates from Shanghai eased for 40ft containers. With buyers expecting further reductions in freight rates, many have held back on spot purchases, anticipating additional price corrections.

Looking ahead, with weak demand persisting across downstream sectors amid no expectation of significant changes in feedstock costs, n-Heptane prices are likely to remain under pressure in the near term. The oversupply situation in the market continues to overshadow any prospects of a price rebound.