Tetrahydrofuran Prices Move With Slow and Steady Pace in Europe

Germany- Tetrahydrofuran market prices showcased minute fluctuations in the domestic market as the demand outlook for the product remained on the softer side. Tetrahydrofuran prices slowed in the fifth month of 2023 due to stable feedstock (Butanediol) prices and a slight increase in the industrial operational rate. In addition to the major factors that influence the market prices for Tetrahydrofuran, other contributing factors like economic slowdown, inflation, and more have threatened manufacturers' and suppliers' ability to place and complete orders. Tetrahydrofuran's final prices in the German market ranged from USD 1800 to USD 2260 per MT FOB Hamburg.

According to preliminary data released by the European Union, business activity growth in Europe slowed throughout June, signaling a challenging end to the second quarter. Despite numerous forecast errors, markets continue to have high hopes that inflation in the euro area and most advanced economies will quickly return to near-target levels. Even though concerns about energy and the supply chain have decreased since the end of last year, concerns about demand growth, specifically the impact of higher interest rates, and the potential for recessions in domestic and international markets have increased again in June.

All the fluctuations and uncertainty that occurred in the domestic market were initiated by the rise in the cost of living and higher interest rates in the German market. As a ripple effect, the domestic production cost of Tetrahydrofuran remained on the softer side, accompanied by retarding feedstock and energy prices. The prediction of growth in GDP in Germany will remain subdued in the upcoming quarters after the economy enters a technical recession is supported by external and internal factors.

Another facet governing the overall market-changing aspects of Tetrahydrofuran is the temperature rise and proportionally declining demand for spandex-based products. Slower demand and the need to destock the Tetrahydrofuran compelled the manufacturers to keep the prices on the lower edge. In the first place, the European Central Bank raised loan fees which slowed the price movement of the Tetrahydrofuran. The unemployment rate has never been low.

Although not enough to begin reversing the sharp declines in real wages over the past two years, wage growth has been solid and is picking up. Second, despite the enormous expansion in the supposed approach rate, monetary circumstances may not be tight enough, which blocks financial arrangement transmission. As per ChemAnalyst, Tetrahydrofuran prices in the domestic market will continue to show minute price fluctuations as the demand from end-use manufacturing units will remain stable.