The US n-Butanol market has experienced a tremendous decline in prices due to lower-than-expected demand from the downstream construction industry. Meanwhile, Asian players, including China, have witnessed an escalation amidst a tight flow in the procurement of n-Butanol due to maintenance shutdowns at several units, including feedstock propylene.

During the third quarter, the n-Butanol market in the US is underperforming due to a slowdown in economic activities. The market has seen a downtrend of -6.5%, settling at 1928 USD/tonne n-Butanol FOB Texas, USA, in H2 of August 2023. According to Fred, the Producer Price Index by Industry fell from 254.9 in June to 254.1 in July. This trend is expected to continue into August as market players have been unable to pass on higher costs to consumers due to reduced product demand. Furthermore, a sharp decline in new orders for n-Butanol has led to a renewed decrease in production. Companies have continued to reduce their backlogs and finished goods inventories. The price of feedstock propylene, a major cost component in the production of n-Butanol, has also fallen. This drop has resulted in lower production costs for n-Butanol, putting downward pressure on prices. The decline in demand for n-Butanol from the downstream construction market in the US has limited trading activity and pushed down prices.

On the other hand, the n-Butanol market in China has been on a bullish trend in recent weeks, with prices rising by 11% to settle at 1175 USD/ tonne n-Butanol spot EX-Shandong, China, during H2 of August. The shutdown of some n-Butanol plants in China for maintenance has reduced the supply of the product in the domestic market. In addition, the feedstock propylene plant of Fujian Meide in Jiangyin, Fujian, China, with a capacity of 660,000 mt/year, has been running at normal operating rates throughout the month. The tight spot market for n-Butanol has led traders to acquire immediate procurement at higher rates. The demand for n-Butanol was strong, and the supply was limited during this timeframe. The strong performance of the downstream plasticizers industry, a major consumer of n-Butanol, is further supporting an uptrend.

According to ChemAnalyst, the overall outlook for the n-Butanol market in the USA is uncertain. It will depend on the evolution of the global economic and political situation. However, the n-Butanol market in China is expected to grow further in the short term, with small fluctuations depending on changes in supply and demand dynamics.