Tetrahydrofuran Contracts Plunged in The Chinese Market

Tetrahydrofuran prices continued to fall in the Chinese market after the festive season comes to an end. The Winter Beijing Olympics remained delayed or halted, resulting in lower demand for the product in China. During the post-holiday season, demand for THF from pharmaceuticals, a significant downstream, was slightly muted.

The domestic Tetrahydrofuran market has dipped to an acceptable price level this week after a significant rise. The price of upstream Maleic Anhydride and Butanediol has also dropped to a certain level. The price spread between raw materials and Tetrahydrofuran (THF) has been primarily due to a supply and demand imbalance. The upstream Butanediol prices have remained stable to firm for quite some time. As a result, Tetrahydrofuran FOB-Qingdao prices have stabilized.

In the last quarter, demand for THF deteriorated in countries such as China and India. Muted demand for Tetrahydrofuran in domestic and international markets has kept the prices plunging. The sluggish demand trends have led to an absence of the surged order in the pharmaceuticals for typical solvent ingredients. Local producers in China, the world's largest exporter, are struggling to stay profitable. In addition, the domestic epidemic resurfaced in March, wreaking havoc on domestic Tetrahydrofuran and the downstream PTMEG plant output, processing, and shipping. Another crucial factor is that most downstream clients have the mentality of "purchasing up but not down."

As per ChemAnalyst, "THF supplies are likely to double in Q2 as downstream industries speed up production in anticipation of a significant increase in demand in the coming quarter. As a result, the THF market in China is projected to improve soon, with a good outlook. "