Tertiary Butyl Alcohol Prices in Germany Experience Uptick Amid Israel-Hamas Conflict
- 19-Oct-2023 5:17 PM
- Journalist: Li Hua
Hamburg, Germany: The Tertiary Butyl Alcohol market in Germany demonstrated a stable trend in October after observing a declining trend in September. Over the past few weeks, amid the fluctuation in the raw material of Tertiary Butyl alcohol, mainly Acetone and Methanol, the prices were overall balanced, although the demand outlook was sluggish.
In September, Tertiary Butyl Alcohol prices decreased week-on-week due to poor demand conditions. Due to the region's weak purchasing attitude, demand from the downstream solvents manufacturing industry has remained low. Also, the European Central Bank continued to hike interest rates, and the economy suffered from the long-term consequences of tighter monetary policy. On the supply side, production costs of Tertiary Butyl Alcohol fell due to insufficient cost support from upstream Methanol.
According to the Federal Statistics Office, the industrial outputs have also declined, indicating that the chemical sector is under grievous pressure amid recessionary fear. Additionally, high pressure also contributed to a low earning situation, as the prices of chemicals were under pressure, although the manufacturing costs were running high for petrochemicals like tertiary butyl alcohol (TBA).
According to the Verband der Chemischen Industrie (VCI), German chemicals industry production declined 10.5% year on year in the first six months of 2023, or by 16.5%, omitting statistics from the manufacturing sector. According to the association, amid dwindling consumer demand, the sales figures have dropped by a significant margin in the domestic as well as overseas markets.
Moreover, the market sentiments for Tertiary Butyl Alcohol have also been affected by crude oil prices. After Hamas launched a large-scale surprise attack on Israel on October 7, crude oil prices rose by almost 5%. However, prices fell modestly in the days after the start of the war since the conflict had no direct influence on the oil supply. Even though neither Israel nor Palestine are big oil producers, crude oil prices have remained sensitive to the conflict between the two nations since Iran funds Hamas. Iran's likely involvement in the war in an already oversupplied market might cause oil prices to climb even more. As a result, in the week ending on October 13, the prices of Tertiary Butyl Alcohol FOB Marl increased by nearly 3.0%.
According to the ChemAnalyst database, the prices of Tertiary Butyl Alcohol are anticipated to increase in the upcoming weeks as crude oil prices have again gained strength and are anticipated to cross the 100-dollar mark, favored by OPEC+, mainly Saudi Arabia. However, the demand front of the Tertiary Butyl Alcohol market looks skeptical amid the underperforming market outlook given by many market participants.