Global uncertainties amid the ongoing crisis between Russia and Ukraine have resulted in strong crude oil prices in the global market. Consequently, cost pressure over Raffinates and further downstream Butylene and Isobutylene has increased. Hence, prices of Isobutylene have shown an upward trajectory during the past few weeks on the back of robust Raffinate R1 and R2 prices.

Furthermore, strong demand for Isobutylene from tire and gasoline additives has been driving the prices higher as Isobutylene is used in the manufacture of Elastomers. Isobutylene is also majorly used as a monomer to produce polymers including polybutene, and Polyisobutylene. As Per ChemAnalyst database, the prices of Isobutylene FD Hamburg Germany were assessed at USD 1115 Per tonne, while Quotation in the USA FAS Texas was reported around USD 1050 per tonne.

The ongoing crisis between Russia and Ukraine has majorly influenced upstream crude oil prices and downstream Raffinate prices which has created an unnecessary imbalance in the market dynamics. This has resulted in a supply shortfall that weighed on the high pricing of Isobutylene in the global market. Strong demand from the tire industry has prompted the industries to boost their operating rates to secure revenues which affected the market values of heavily used raw materials such as Isobutylene. Moreover, high freight charges contributed to the high price of Isobutylene in the global market.

As per ChemAnalyst, “Isobutylene prices are expected to increase as the drastic decline in the crude oil prices is highly unlikely given the current market dynamics. Strong crude oil prices will hence pressure Raffinate values in the global market increasing cost pressure on the downstream Butylene and Isobutylene. Rising freight charges on key routes have further added to the supply concerns globally. Meanwhile, demand from the downstream industries is expected to remain strong in the upcoming quarter.”