For the Quarter Ending September 2024
North America
Isobutane prices remained confined to a narrow range in Q3 2024, reflecting the influence of several interconnected factors. The U.S. economy displayed mixed resilience, maintaining momentum despite ongoing inflation concerns and geopolitical challenges.
Supply dynamics were influenced by consistent manufacturing output and shifting trade conditions. The Producer Price Index (PPI) for manufacturing edged down from 249.624 in Q2 to 248.383 in Q3, indicating modest cost reductions for producers. The economy benefited from inventory replenishment efforts, with GDP growth reaching 3.0% in Q2 and forecasted to rise 2.7% for the year.
Consumer and business investments, supported by the CHIPS Act and other policies, sustained demand, while inflation eased below 3.0% by July. However, risks to supply chains emerged from geopolitical tensions in Ukraine and the Middle East and the possibility of new trade tariffs. Although the Fed’s expected rate cuts aim to maintain economic growth, uncertainties in labor markets and trade policy could impact supply conditions through 2025.
Asia
In Q3 2024, isobutane prices in China followed a downward trend, with prices declining by2% in September from USD 1790/MT in August. The price decline was driven by weakened demand from both domestic and international markets, particularly in key sectors like refrigerants, where seasonal slowdown set in due to the arrival of winter. Additionally, demand from plastic manufacturing softened as peak procurement tapered off. Despite these challenges, China’s manufacturing sector showed slight improvement, with the PMI rising to 49.8% in September, suggesting a modest rebound in industrial activity. Supply levels remained robust throughout the quarter, with sufficient inventories to meet domestic and export needs, ensuring uninterrupted availability. Broader economic indicators, including a slowdown in industrial output and a decline in oil refinery and steel production, further dampened chemical demand. Although automotive production grew by 9% month-on-month, supported by NEV subsidies, it was insufficient to counterbalance the overall bearish market sentiment. Despite some hopes for demand recovery during China’s peak consumption seasons, such as "Golden September and Silver October," the quarter concluded with low demand fundamentals, stable supply, and downward pressure on isobutane prices.
Europe
In the third quarter of 2024, product prices in Europe exhibited limited fluctuations due to economic uncertainties linked to the ongoing West Asia conflict and slow growth in Europe and the U.S. Freight markets faced multiple challenges, with carriers like MSC and CMA CGM pushing FAK rates to $6,500 per container because of tight space and added surcharges. Red Sea disruptions and delays at Singapore ports further strained logistics. Air freight rates from Northeast Asia to Europe surged by 40% year-over-year, driven by a surge in e-commerce and semiconductor demand. Despite expanded capacity, supply chain imbalances remained unresolved. Geopolitical tensions and upcoming seasonal demand suggest continued volatility into Q4 2024. Meanwhile, Germany’s industrial sector continued to struggle, with weak production, high energy prices, and falling export demand, affecting the broader eurozone economy. Additionally, outlook for Q4 2024 seems dull too, as the geopolitical situation of the world is still disbalanced and in a threatening situation
