For the Quarter Ending September 2024
North America
The North American Mineral Turpentine Oil (MTO) market faced a bearish situation during the quarter, largely driven by a 13% decline in crude oil prices. Despite this price drop, MTO production in the US remained low due to reduced refinery rates. According to data from the EIA, average refinery run rates decreased from 92.7% in July to 92.2% in August, and further to 90.8% in September 2024, as the ongoing hurricane season prompted cautious operational measures across US refineries. Some facilities even declared force majeure due to damage from Hurricanes Beryl and Francine, further contributing to the low production levels of MTO.
Demand conditions from the downstream paints and coatings industries were unfavourable, impacted by seasonal factors and high mortgage rates that dampened homebuying prospects. As the quarter progressed, uncertainty loomed over the market due to upcoming elections, leading to suppliers receiving only small quantities of orders.
This combination of low production, weak demand, and market uncertainty created a challenging environment for the Mineral Turpentine Oil market in North America.
APAC
The Asian Mineral Turpentine Oil (MTO) market experienced notable fluctuations during the third quarter of 2024. Overall, MTO prices remained stable, exhibiting a variation of approximately 0.8%. In the opening month of the quarter, reduced production amidst higher consumption drove a bullish market, with active restocking ahead of the festive season contributing to rising prices. However, the market soon shifted to a bearish trend as production costs decreased, largely due to a 13.5% decline in crude oil prices, which lowered MTO production costs. Additionally, several refineries that underwent maintenance in the earlier part of the quarter returned to production, improving domestic supply levels. This bearish market situation was further exacerbated by the underwhelming performance of the downstream construction industry, particularly during the monsoon season, which dampened demand prospects. Even after the monsoon season, recovery was reported as sluggish, continuing to exert downward pressure on the MTO market. As a result, the combination of increased supply and weakened demand contributed to a more challenging market environment for Mineral Turpentine Oil across the region.
Europe
The European Mineral Turpentine Oil (MTO) market experienced a bearish trend throughout the quarter, primarily driven by unfavourable demand conditions from the downstream construction sector and a 13% depreciation in crude oil prices, which eased production costs. Despite this, MTO supplies across Europe remained moderate due to several refineries undergoing maintenance turnarounds, limiting production capacity. Major firms conducted strategic reviews of their assets, leading to refinery closures and a subsequent reduction in domestic supplies. Additionally, strikes in Germany and various other regions threatened export conditions, compounded by the worsening crisis in the Red Sea, which resulted in inventory accumulation at ports and further pressured prices downward. The ongoing downturn in the construction sector persisted, with investment sentiments remaining historically low, leading to a lack of incoming work for European contractors. Consequently, many suppliers opted to destock construction materials in response to deteriorating demand conditions. Overall, these factors created a challenging environment for the MTO market in Europe, characterized by reduced production, weakened demand, and declining prices.
For the Quarter Ending June 2024
North America
The second quarter of 2024 has stabilized in the Mineral Turpentine Oil (MTO) market in North America, marked by a mixed trend in prices during this quarter. The decline in MTO prices in May 2024 has been influenced by several significant factors, primarily the reduction in crude oil costs and oversupply conditions. The depreciation in the prices of upstream has notably eased production costs, contributing to lower MTO prices. Furthermore, an oversupplied market condition, driven by excess inventories and high stockpiles of MTO, exacerbated the price decline.
Turning to June 2024, the end of the second quarter witnessed prices of MTO increase by approximately 2.6% due to heightened production costs and cautious operations across the US Gulf Coast and Louisiana despite demand conditions being largely unfavorable from the downstream construction market. The increment in the prices is further attributed to lengthened delivery times and higher transportation costs which further pushed the prices of MTO on the higher end. Higher mortgage rates are expected to further cast a negative sentiment for the transactions in the downstream construction industry keeping overall demand conditions moderate. The procurement activities from the industrial application remained positive for the time being.
The correlation between reduced upstream prices and slow downstream demand was evidence of stability in the MTO prices. Disruptions such as issues with maritime transportation and highway insecurity further complicated the supply chain, adding to the tightening of supplies in the US MTO market.
APAC
The second quarter of 2024 witnessed a notable depreciation in the prices of Mineral Turpentine Oil (MTO) across the APAC region. This quarter was characterized by a culmination of various factors that collectively influenced market prices. Foremost among these was the substantial reduction in feedstock Crude Oil prices, which saw a depreciation of approximately 7% globally. This reduction in production costs, however, did not translate directly into lower MTO prices due to pressures from downstream activities, particularly in construction and exports of petroleum products. Additionally, the market grappled with moderate inventory levels and a relatively softer turnaround in manufacturing activities, further squeezing profit margins. In India, the price dynamics of MTO saw the most significant price fluctuations, driven by a combination of strong demand from the downstream paints and coating industry and infrastructural development activities during May 2024. Despite the positive demand, India's MTO pricing environment was predominantly bearish due to an oversupplied market. The production disruptions due to extreme heat waves and reduced working hours exacerbated the supply situation. Overall, the price trend for MTO in India reflected a declining sentiment. The quarter concluded with the price of MTO at USD 988/KL, Ex-Mumbai, signaling a negative pricing environment. No specific plant shutdowns were reported during this quarter, but the cumulative effect of the aforementioned factors led to a challenging pricing scenario for MTO in the APAC region, particularly in India.
Europe
In the second quarter of 2024, the European Mineral Turpentine Oil (MTO) market experienced significant price decreases due to several adverse factors. This period saw declining crude oil prices, which lowered production costs for MTO. Additionally, the market faced an oversupply from the influx of inexpensive imports from neighboring regions. Despite moderate demand from the downstream construction sector, the overall pricing environment remained negative as supply consistently exceeded demand. Seasonal rainy weather further reduced construction activities, impacting MTO demand. In Germany, the MTO market was particularly strained, with a marked decline in downstream demand. The country experienced a sharp contraction in the construction sector for the second consecutive month, exacerbated by logistical challenges due to severe flooding, further hindering market circulation. Consequently, the German market saw the most substantial price changes within the region. The overall trend reflected a consistent downward trajectory, heavily influenced by both excess supply and weakened demand conditions.
For the Quarter Ending March 2024
North America
The North American MTO market experienced a largely bullish market situation during the opening quarter of 2024. The downstream construction sector across the United States witnessed a healthy performance as indicated by the number of house completions, heightened commercial construction activities and real estate developers being more active during the months of February and March 2024, except in the month of January 2024.
The initial month of this quarter witnessed a slowdown in the construction sector due to challenging weather conditions which led to limitations in logistics and transportation. The month of January usually witnessed a slowdown in the demand from the downstream paints and coating industries, stemming from subdued construction activities across North America due to the prevailing winter season.
In terms of production costs, prices of MTO across the US market continued to receive cost support from increasing prices of feedstock Crude Oil, which have appreciated by approximately 10% during the opening quarter of 2024, due to mounting geopolitical tensions across the Red Sea.
Asia
The initial quarter of 2024 has posed challenges for Mineral Turpentine Oil (MTO) in the APAC region, with prices experiencing notable fluctuations influenced by various factors. Particularly in India, the region's largest market, significant price changes have been evident, reflecting broader trends. Across Asia, the MTO market has been characterized by bearish sentiment, with prices declining by approximately 3% compared to the previous quarter. This downturn can be attributed to diminished demand from the paint and coating industry, exacerbated by a slowdown in the construction sector during the peak winter season. The post-festive season lull has further contributed to reduced demand, resulting in ample supplies and surplus inventories. Additionally, the expansion of manufacturing activities in India has exacerbated the oversupply situation. Despite improvements in weather conditions, demand from downstream industries, particularly the textile sector, has remained modest. Consequently, the pricing environment for MTO in the APAC region, particularly in India, has been negative in the first quarter of 2024, marked by low demand from the paint and coating industry and an oversupply scenario leading to price declines.
Europe
Throughout the opening quarter of 2024, prices of Mineral Turpentine Oil (MTO) in the European market displayed volatility, despite a notable increase in the prices of crude oil, rising by approximately 10% during this period. Initially, MTO prices faced a bearish market situation due to subdued performance in the construction sector. However, as the quarter progressed, the heightened prices of crude oil, driven by geopolitical tensions, eventually led to an increase in MTO prices. Despite this, demand conditions for MTO from downstream paints and coating industries remained unfavorable, reflecting the subdued construction sector. Across Europe, the construction industry continued to experience retrenchment for the fifteenth consecutive month, evident in declining permits and construction projects. Real estate firms maintained a pessimistic outlook for the year, with historically negative investment sentiments observed across all segments of the construction sector, including residential, commercial building, and civil engineering activities. The European MTO market received some support from improvements observed in the British market, where the construction sector approached stabilization, offering some demand support for downstream paints and coating industries. Additionally, secondary demand emerged from the downstream textile industry, as transactions increased due to changing weather conditions.
For the Quarter Ending December 2023
North America
In the initial two months of the 4th quarter, Mineral Turpentine Oil prices experienced a predominant bearish trend, marked by a poor performance in demand from the textile and construction industries.
The commencement of the quarter witnessed a rise in mortgage rates in the United States, reaching approximately 8% for a 30-year fixed term and over 7% for a 15-year fixed term. This increase contributed to subdued demand in the paints and coating sector of the construction industry. High-interest rates led to a notable slowdown in construction activities, primarily affecting the waning demand from the housing sector. However, there was still existing demand, notably from the importing Mexican market, where the construction industry continued to thrive.
The Mexican construction industry witnessed job creation for the eighth consecutive month, sustaining positive business sentiments for the ninth consecutive month. In the last month of the fourth quarter, prices saw an increment due to the peak festive season and declining mortgage rates. This improvement stimulated renovation activities and boosted purchasing sentiments in the downstream textile industry.
APAC
In the APAC region, Mineral Turpentine Oil prices underwent a significant bullish surge, recording an approximate 20% increase in the initial two months of the last quarter of 2023. However, by December 2023, prices experienced a depreciation of approximately 5%. The primary factor behind this price fluctuation was the surge in festive demand, compelling widespread renovation activities and exerting substantial pressure on the downstream textile industry. Positive festive sentiments generated heightened demand in the downstream paints and coating industry, surpassing the capacity of existing supplies. Moreover, frequent rains in the Ex-Works locations across Southeast Asia contributed to extensive supply disruptions, hindering product circulation. As anticipated, in December 2023, suppliers conducted destocking activities due to the market's post-festive season sluggishness. This trend was further accentuated by improved weather conditions, leading to the sale of excessive inventories at negotiable prices to accommodate fresh orders. The assessed prices of Mineral Turpentine Oil stood at USD 1032/KL in the Indian market during December 2023.
North America
In the initial two months of the 4th quarter, Mineral Turpentine Oil prices experienced a predominant bearish trend, marked by a poor performance in demand from the textile and construction industries. The commencement of the quarter witnessed a rise in mortgage rates in the United States, reaching approximately 8% for a 30-year fixed term and over 7% for a 15-year fixed term. This increase contributed to subdued demand in the paints and coating sector of the construction industry. High-interest rates led to a notable slowdown in construction activities, primarily affecting the waning demand from the housing sector. However, there was still existing demand, notably from the importing Mexican market, where the construction industry continued to thrive. The Mexican construction industry witnessed job creation for the eighth consecutive month, sustaining positive business sentiments for the ninth consecutive month. In the last month of the fourth quarter, prices saw an increment due to the peak festive season and declining mortgage rates. This improvement stimulated renovation activities and boosted purchasing sentiments in the downstream textile industry.
Europe
The European market situation for Mineral Turpentine Oil predominantly displayed a bearish trend. Demand from the paints and coating industry within the construction sector experienced retrenchment, aligning with a decline in construction activities. The diminished influx of fresh work orders and declining permits resulted in job shedding and inventory pushbacks, alleviating pressure on the downstream paints and coating sectors. Demand conditions within the construction sector were highly unfavorable, bordering on recessionary, prevailing across the European market. Real estate firms noted the ease of subcontractors for the seventh consecutive month. All three sectors of the construction industry within the Eurozone witnessed contractions, with housebuilding emerging as the weakest performing sector. Civil engineering and commercial building activities also saw significant contractions in the fourth quarter. Despite a robust demand recorded from the secondary textile industry during the peak winter season, it did not effectively ameliorate the market situation of Mineral Turpentine Oil. Additionally, energy prices were a threat to the European market, which came out to be stable throughout this timeframe, however, producer anticipated an incline in coming quarter.
For the Quarter Ending September 2023
North America
Prices of Mineral Turpentine Oil have largely exhibited a mixed market situation, with prices rebounding in the second half of the third quarter of 2023 in the North American market, despite prices of upstream Crude Oil increasing by almost 24%. Demand from the downstream construction industry waned as construction activities were largely halted as mortgage rates soared, with current rates being recorded at 8% for a 15-year fixed term. Demand from the downstream construction industry increased as industrial activities strengthened, with automotive and construction industries strengthening and falling input costs. Prices of MTO in the United States were largely demand-driven as the construction of factories for the electric automotive sector commenced strongly. Government expenditure also improved despite high-interest rates, which supported the momentum of the construction industry after the first half of the third quarter. Moreover, increasing interest rates are likely to keep the prices appreciating as inflation rates are not curtailed to the target corridor. Additionally, increased demand for LNG in the winter months of 2023 is further likely to increase costs of upstream Crude Oil, which is further likely to add to production costs.
APAC
Prices of Mineral Turpentine Oil have increased by approximately 2% in the Asian market in the third quarter of 2023, as prices of upstream Crude Oil increased by almost 24% in the third quarter of 2023. Demand from the downstream construction industry gained momentum as the festive quarter neared. Demand from the downstream paint and solvent sector also increased as automobile production strengthened, with the production rates being largely up by approximately 12%. With demand from the downstream industry slowly gaining momentum and consumer purchasing activities improving, suppliers were largely cautious of inflating prices to a large extent and, therefore, proceeded to gradually increase prices of the product amidst the moderate recovery of the Southeast Asian economy. Demand for MTO of imports from the Southeast Asian markets also gradually improved, with consumer sentiments slowly returning to a positive outlook after the recessionary conditions. As the festive quarter neared, renovation activities also strengthened, which further added pressure to the downstream paints and solvent industry.
Europe
Prices of Mineral turpentine oil have exhibited a largely mixed trend in the European market, with prices observing a bearish trend in the first half of the third quarter of 2023 and then followed by a bullish market situation in the next half of the third quarter of 2023 as prices of Crude Oil increased by almost 25%. The decline in the prices in the months of July and August is primarily attributed to sluggish demand from the construction industry as building permits declined. In the automotive sector, demand remained as automotive production fell by almost 11% in the month of August before rebounding by almost 27% in September. Towards the end, construction activities were yet to fully recover as trading activities across the Eurozone commenced after cooling inflation rates in Germany, Belgium, and the Netherlands, where purchasing sentiments improved after sluggish economic growth. Moreover, prices of Mineral Turpentine Oil are expected to increase as Crude Oil prices are likely to increase due to increased demand for LNG as peak winter months arrive.
For the Quarter Ending June 2023
North America
The Mineral Turpentine Oil (MTO) market has been fluctuating throughout this quarter in the North American region. Growing inflationary pressure and global economic slowdown caused the government to raise interest rates high. This further weakened the buying enthusiasm of the bulk consumers during this time frame. The collapse of two major banks in the US further caused disruptions in many construction projects. Many construction projects were either canceled or delayed due to the bank shutdown. However, a revision in orders from the construction sector was recorded by the beginning of June 2023. Further, fluctuation in prices of upstream Crude Oil also impacted the prevailing price trend. As indicated by FRED the Purchasing Managers Index of the country has depreciated throughout the second quarter, while the US consumer price Index rose. The CPI of the US rose by a margin of 0.3% in June from the preceding month May 2023. These declining economic indicators indicated towards slow economic activity consequently affecting the demand for MTO globally.
APAC
Pessimistic market sentiments for Mineral Turpentine Oil prevail in the Asian region. Fluctuating prices of upstream Crude Oil and depreciating demand from the downstream paints and coatings industry were the key factors attributing towards the decline in prices of the product. The construction sector a significant consumer of MTO for paints and coatings, faced sluggish demand during this period. The prices have shown a significant dip in the Indian market during this quarter and were recorded at INR 77200/MT in June 2023. Further, China’s construction sector has been observing a downturn since April 2023 due to a weaker-than-expected property sector. Further, amidst the global economic slowdown and growing inflationary pressure, consumers from the property sector remained hesitant to make purchases. Additionally, OPEC-led Saudi Arabia declared at the beginning of this quarter that it would reduce crude oil output by 500 Mb/d for the rest of the year. This action from Saudi Arabia has also impacted the price of Mineral Turpentine Oil globally. As indicated by the National Bureau of Statistics China, the Purchasing Manager Index is declining and has been recorded at 48.8 in May 2023 after a marginal decline of 0.8% from the previous month along with a decrease in industrial growth rate from 5.6 in April 2023 to 3.5 in May 2023. These declining economic indicators hinted towards reduced economic activity, potentially affecting MTO demand.
Europe
Prices of Mineral Turpentine Oil declined in European market throughout the second quarter in the wake of declining raw material prices and depreciating demand from the end-user market. Further, hiked interest rates in the country further weakened the buying enthusiasm of the consumers. Lack of procurement orders for paints and coatings from the construction sector further supported the prevailing price trend. Additionally, disruptions in supply chains were observed due to ongoing strike in France consequently leading to stockpiled inventories in the country. Inflation in Germany has slowed down to 5.6% in June from 6.1% in May but is still above the average level. Further, as per data from the German Federal Statistical Office, the Consumers Price Index declined by 0.1% in May from the previous month. Additionally, as per data from Eurostat, the Producers’ Price Index of the region declined to 138.3 in May from 143.4 in March and is expected to decline further. The average decline was 3.6%. These declining economic indicators hinted towards reduced economic activity, potentially affecting MTO demand.
For the Quarter Ending March 2023
North America
During Q1 2023, prices of Mineral Turpentine Oil (MTO) kept on fluctuating in the North American market, where demand fundamentals remained low from the domestic downstream sectors, and prices were primarily driven by orders from the international market. Data reveals that the downstream industries like automotive, paints, and adhesives showed some improvement by the end of the quarter but remained below expectations due to prolonged inflationary pressure. Furthermore, the FED's frequent price revisions on domestic interest rates were contributing to concerns about the country's economy and affecting demand for the product.
Asia
The price of Mineral Turpentine Oil (MTO) in India decreased by 2.4% in March 2023 compared to the previous month, despite the seasonal increase in demand from downstream industries. The low demand in the international market also affected the prices of imported cargo. In February 2023, the product's price had increased by 3% due to high demand from downstream industries and the country's better economic performance compared to major economies. The market situation was bullish in February and bearish in March, with moderate supplies and low demand. It is expected that prices may rise further in the coming month due to high demand.
Europe
The European economy kept on underperforming due to the Russia-Ukraine war, which has put pressure on regional economic activities. As per data, demand for MTO from the domestic automotive sector has remained low, while other sectors, such as adhesive and paints, have also experienced a seasonal slowdown. Despite some disruptions in the supply chain caused by snow, supplies remained stable to firm, and the narrow demand-supply gap supported a downward price trend. The reduced risk of a recession generated optimism for future demand.
For the Quarter Ending December 2022
North America
The fourth quarter of 2022 got off to a steady start for the US Mineral Turpentine Oil (MTO) market; its prices increased greatly at the beginning of the quarter before declining as the end of the quarter drew near. The market price of MTO fluctuated in response to changes in downstream demand from various industries. Due to the unstable market conditions for the downstream paints and varnishes industries throughout the quarter, the demand for Mineral Turpentine oil in the domestic market fluctuated. Variable manufacturing costs and varying upstream expenses also had an impact on the Mineral Turpentine Oil market's growth throughout the quarter and affected the market's overall pricing.
APAC
The Asia-Pacific Mineral Turpentine Oil (MTO) market had a good start to the fourth quarter of 2022; its value rose significantly at the start of the quarter before falling as the end of the quarter drew closer. In response to variations in downstream demand from various industries, the market price of MTO changed. The demand for Mineral Turpentine Oil in the domestic market varied during the quarter because of the fluctuating market circumstances for the downstream paints and varnishes sectors. The Mineral Turpentine Oil market's growth throughout the quarter was impacted by fluctuating manufacturing prices and fluctuating upstream costs, which also influenced the MTO market's total pricing.
Europe
For the European Mineral Turpentine Oil (MTO) market, the fourth quarter of 2022 got off to a strong start; its prices rose significantly in the first half of the quarter before falling as the conclusion of the quarter drew closer. The downstream demand from various industries changed, which caused changes in the market price of MTO. Throughout the quarter, demand for Mineral Turpentine Oil in the domestic market fluctuated because of the altering market conditions for the downstream paints and varnishes sectors. Shifting upstream costs and shifting manufacturing prices, which also had an impact on the total pricing of the MTO market, hampered the growth of the Mineral Turpentine Oil market during the quarter.
For the Quarter Ending September 2022
North America
Due to changing feedstock costs, Mineral Turpentine Oil prices fluctuated in the third quarter of 2022 in the North American market. The cost of Mineral Turpentine Oil began to rise in July, but it soon fell in August before beginning to rise once more in September. Due to changes in the feedstock market price during the quarter, Mineral Turpentine Oil's market value in the domestic market fluctuated. While witnessing incremented pricing trend in July and September, the downstream demand from the paints and varnishes sectors sharply decreased in August. Similar results were observed in the market sentiment for mineral turpentine oil as a result.
APAC
The prices of Mineral Turpentine Oil declined consistently in the Asia-Pacific region during the 3rd quarter of 2022 after surging in the month of July. Mineral turpentine oil prices started to rise in July, but they quickly dropped in August and witnessed a bullish trend again in September. The market value of Mineral Turpentine Oil in the domestic market changed during the quarter because of variations in the feedstock market price. Although prices increased in July, the downstream demand from the paints and varnishes industries fell significantly in August, resulting in reduced price value for the rest of the quarter. Hence, the assessed price value of Mineral Turpentine Oil was USD 1303.21/Litre Ex-Mumbai (India) during September.
Europe
The third quarter of 2022 saw price fluctuations for Mineral Turpentine Oil in the European market due to shifting feedstock costs. In July, the price of Mineral Turpentine Oil was growing, but it quickly dropped in August before climbing once more in September. The value of Mineral Turpentine Oil in the domestic market fluctuated due to the market price of the feedstock, changing the upstream cost during the quarter. The downstream demand from the paints and varnishes industries fell precipitously in August while it increased in July and September. As a result, similar effects were seen in the market sentiment for Mineral Turpentine Oil.
For the Quarter Ending June 2022
North America
Due to the increasing feedstock prices, Mineral Turpentine Oil prices rose in North America throughout the second quarter of 2022. Petroleum's market worth as a raw material increased during the quarter due to supply issues, which increased upstream costs to produce Mineral Turpentine Oil and raised its price. Mineral Turpentine Oil's cost has also increased due to demand from numerous downstream sectors like paints and varnishes. The cost of Mineral Turpentine Oil increased in the domestic market because of rising energy prices, freight expenses, and backed-up ports brought on by the tensions surrounding the Russia-Ukraine war.
APAC
The market sentiments of Mineral Turpentine Oil showcased a fluctuating pricing trend in the Asia-Pacific region during quarter 2 of 2022, backed by instability in feedstock price. The price of Mineral Turpentine Oil firstly declined in April, then surged consistently till June. As the value of feedstock Petroleum soared readily in May and June, so did the manufacturing cost of Mineral Turpentine Oil (MTO), hence escalated its prices in the domestic market. Furthermore, the downstream demand for paints and varnishes increased after April, propelling the Mineral Turpentine Oil (MTO) even more. The increased upstream cost and downstream offtake augmented Mineral Turpentine Oil's price.
Europe
During the second quarter of 2022, prices for Mineral Turpentine Oil decreased steadily in Europe in contrast to North America. Weak end-user demand from the paints and varnishes industries were the main contributors to this drop. The market price of Petroleum dropped because consumer spending was less than expected. Due to the amount of excess inventory in the shops and the steady supply rate, the costs of Mineral Turpentine Oil in the European market were similarly outrageously cheap. Weak offtake and constant supply flow were the main contributors to the lowering price value of Mineral Turpentine Oil in the domestic market.
