The US Butyric Acid market closed August 2024 on a steady note, with demand conditions remaining moderate. Production costs for Butyric Acid stabilized due to steady feedstock Propylene (Refinery Grade) prices. Production conditions for Butyric Acid improved as several Propylene plants resumed operations. Notably, INEOS Polymers lifted its force majeure at its Texas facility, and INVISTA returned to full production by late August 2024. However, Enterprise Products Partners' Unit 2 remained offline following a failed start-up after maintenance.

Despite the return of some Propylene plants, the supply of Propylene (Refinery Grade) remained moderate across the US market, which continued to affect the production of Butyric Acid. This was largely due to planned reductions in output by US oil refiners amid declining margins as seasonal demand waned. Marathon Petroleum intended to lower its capacity utilization to 90% across its 13 refineries, down from 97% in Q2. PBF Energy planned to cut its processing rates to the lowest level in three years. Valero Energy aimed to reduce its operating rate from 3 million barrels per day to 2.86 million bpd, the lowest in two years. Phillips 66 also planned to cut processing rates to the low 90s, down from 98% in Q2, the highest in five years. Although US refinery run rates increased slightly throughout August—from 90.5% in the first week to 93.3% by the end of the month—production conditions for Butyric Acid remained stable, albeit with historically lower increments. Anticipation of further heavy maintenance turnarounds in the fall could impact Butyric Acid supplies and pricing.

Demand for Butyric Acid from the animal feed sector was moderate but slightly weakened from July 2024. The USDA cut the US coarse grain production forecast by 1.1 million tons to 396.4 million tons which indicated challenging conditions for the consumption of Butyric Acid from animal feed production. Despite a 1% decrease in harvested corn area being offset by yield gains, a 94-million-bushel reduction in sorghum output outweighed these gains. Conversely, U.S. consumer spending rose by 0.5% in July, following a 0.3% increase in June, as reported by the Commerce Department on August 30, 2024. This growth, indicating a solid economic footing, suggests less likelihood of a half-percentage-point interest rate cut by the Federal Reserve and supports Butyric Acid demand in the cosmetics and food flavouring industries.

Furthermore, in the upcoming weeks, prices of Butyric Acid are expected to increase as moderate production, and the nearing of festive quarter is expected to increase the probability of restocking activities amongst suppliers accompanied by improvements in demand from the cosmetics and food and flavouring industries.