For the Quarter Ending December 2024
North America
The U.S. n-Butanol market saw a significant decline of approximately 23% during the fourth quarter of 2024, despite disruptions typically associated with the hurricane season. Weak construction spending across the U.S. was a key factor behind the bearish demand conditions, as the construction sector is a major consumer of n-Butanol. Export conditions remained unfavorable, further exacerbating market challenges.
The strike between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) caused the suspension of port operations, leading to a significant accumulation of inventories across the market. Mid-quarter, global oxo-alcohol capacity expanded by 1.3 million tons per year, as new facilities came online. This increase in global capacity heightened competition, particularly from the Asian market, further pressuring U.S. n-Butanol prices.
Toward the end of 2024, U.S. suppliers attempted to offload inventories in bulk due to destocking activities aimed at avoiding inventory devaluation and year-end tax repercussions. These combined factors intensified bearish market conditions, pushing prices even further downward.
APAC
During Q4 2024, the Asian n-Butanol market experienced fluctuations, with prices rising by 1.2% early in the quarter before dropping 2.8% by its end. In Japan, production costs increased in November as feedstock Propylene prices rose by 1.1%, driven by maintenance turnarounds and limited PDH operating rates in South Korea. Supply constraints worsened as Taiwan’s Formosa Plastics and South Korea’s Hanwha Solutions cut production, while rising shipping costs pushed import prices higher. The Intra-Asia Container Index surged 45% in November, from $573 to $829 per 40ft container, amid pre-Christmas demand. JNC Corporation raised n-Butanol prices by Yen 10,000/MT for October 2024 deliveries due to rising logistics and storage costs. However, sluggish demand from the paints and coatings sector, impacted by Japan’s weak construction activity, reversed the bullish trend. Additionally, over 1 million tonnes of oxo-alcohol capacity came online in China late in the quarter, driving prices downward. By year-end, the Japanese market faced a downturn due to high costs and subdued downstream demand.
Europe
During Q4 2024, prices of n-Butanol across the German market fell by approximately 16.5% due to ample supplies amid low demand conditions. Following OQ Chemicals' return to production in early May, the market struggled to recover from its bearish trend, as demand from primary sectors like paints and coatings remained weak. The downturn persisted throughout the latter part of the quarter, with destocking activities intensifying as early as mid-November 2024. Producers faced challenges in passing on higher feedstock Propylene costs to customers, further pressuring the market. Arbitrage opportunities in and out of Europe stayed largely closed, and inland trading encountered disruptions, exacerbated by maintenance at several ports in Northwestern Europe. These issues hindered product flow, leading to inventory accumulation and further price declines. Toward the year’s end, producers attempted to stabilize the market by reducing production, but these efforts were largely unsuccessful. The European n-Butanol market was marked by limited outages and ample supplies as suppliers sought to move inventories in bulk to avoid tax repercussions. This effort to clear stocks became a dominant factor behind the persistent bearishness observed in the market.
For the Quarter Ending September 2024
North America
In Q3 2024, the North American n-Butanol market faced a significant downturn, particularly in the USA, influenced by a confluence of challenging factors. Supply chain disruptions, especially related to refinery run rates and limited availability of propylene, severely constrained production capabilities. This situation was further exacerbated by weakened demand from downstream industries, notably paints and coatings, which struggled to recover amid seasonal fluctuations. Despite efforts from major producers like Eastman Chemicals to increase prices by USD 110/MT on August 1, 2024, the overall market sentiment remained negative. Strikes organized by the International Longshoremen's Association created additional logistical challenges, complicating an already strained supply chain.
Furthermore, the ongoing hurricane season posed serious operational challenges, impacting production in critical manufacturing areas across the USA. As a result, the pricing landscape for n-Butanol reflected this turmoil, with a notable 6% decline from the previous quarter and a staggering 28% drop compared to the same period last year. The latter half of the quarter continued this downward trajectory, recording another 6% decrease, leading to a quarter-ending price of USD 1,385/MT of n-Butanol FOB New York.
This consistent decline highlights the precarious conditions facing the market throughout Q3 2024, emphasizing the ongoing struggles with supply, demand, and external disruptions.
APAC
In the third quarter of 2024, the Asian n-Butanol market experienced a pronounced bearish trend, with prices plummeting by over 14% by the quarter's end. This decline was primarily driven by an oversupplied market that continued to exert downward pressure on prices. Formosa Plastics Corporation, a key producer in the region, maintained its Mai Liao facility’s run rates at 100% capacity, producing 240,000 metric tons of n-Butanol. Similarly, Luxi Chemical, with a production capacity of 300,000 metric tons per year, also kept its run rate steady at 100% throughout the quarter, contributing to an overall supply glut. This situation resulted in historically low prices for n-Butanol across the Asian market. Despite moderate availability of feedstock propylene—which was expected to impact production—the continued high supply overwhelmed demand. Furthermore, a downturn in the construction sector limited demand from the paints and coatings industries, further exacerbating the price decline. The combination of abundant supply and subdued demand created significant challenges for the n-Butanol market in the region.
Europe
In Q3 2024, the European n-Butanol market experienced a significant decline in prices, particularly in Germany, where fluctuations were most pronounced. Several factors contributed to this downturn. An oversupply of propylene, a critical feedstock for n-Butanol production, led to reduced production costs, further exerting downward pressure on prices. Additionally, subdued demand from the paints and coatings sector, compounded by a slowdown in the construction industry, added to the challenges facing the market. Early in the quarter, the return of OQ Chemicals to production suggested a potential normalization of conditions. However, disruptions arose in August as many propylene plants temporarily shut down for maintenance during the summer holidays. Notably, Shell Chemicals declared a force majeure at its Moerdijk facility, resulting in decreased n-Butanol output across Europe. To mitigate the ongoing bearish market conditions, OQ Chemicals implemented a price increase of $110/MT in the European market. By September, most propylene plants resumed operations, and the arrival of propylene cargoes from the Middle East and Asia led to a supply glut that intensified the already negative sentiment. Germany saw a considerable 21% decrease in n-Butanol prices compared to the same period last year, with a quarter-on-quarter decline of 21% as well. The first half of the quarter recorded a 1% drop, highlighting the persistent bearish market conditions. As Q3 closed, n-Butanol prices in Germany settled at USD 1,560/MT FD Hamburg, reflecting the overall negative sentiment in the region and the ongoing challenges within the market.
For the Quarter Ending June 2024
North America
In the second quarter of 2024, n-Butanol prices in North America faced significant declines driven by critical factors. Production costs soared due to reduced availability of Propylene from unplanned shutdowns and force majeures at major facilities. At the same time, subdued demand, particularly in the construction-related paints and coatings sectors, coupled with higher borrowing costs and regulatory shifts, further pressured prices downward.
Despite modest improvements in manufacturing and economic indicators, overall market sentiment remained pessimistic, with the Federal Reserve holding interest rates steady amid ongoing inflation concerns. In the USA, n-Butanol prices fluctuated dramatically, reflecting broader market trends. Year-over-year, prices plummeted by 39%, highlighting stark contrasts with the previous year. Compared to the preceding quarter of 2024, prices fell by 8%, continuing a downward trend. Seasonal challenges like adverse weather and logistical disruptions exacerbated the supply-demand imbalance, perpetuating negative market conditions.
Throughout the quarter, prices decreased marginally by 2% between the first and second halves, underscoring persistent bearish sentiment. Closing the quarter at USD 1546 per metric ton FOB New York, n-Butanol prices underscored a challenging pricing environment shaped by ongoing production disruptions and subdued demand dynamics. The overall trend remained decisively negative, reflecting the compounded impacts of supply constraints and lacklustre market conditions.
APAC
Throughout the second quarter of 2024, the n-Butanol market in the APAC region endured a notable decline in prices, influenced by several pivotal factors. Chief among these were the prevailing oversupply conditions exacerbated by delayed cargo arrivals, which disrupted market equilibrium. This oversupply, coupled with a subdued construction sector, notably reduced demand from downstream industries such as plasticizers, paints, and coatings. Adding to these challenges were maintenance shutdowns at various Propylene plants across the region, which limited the availability of crucial feedstocks and drove up production costs. The situation was further complicated by fluctuating freight charges and logistical bottlenecks at major ports, intermittently disrupting supply chains and compounding the market's volatility. In Japan, where market dynamics were particularly pronounced, the trend was decisively bearish. Prices experienced a significant 15% decline compared to the same quarter last year, reflecting the profound impact of supply-demand imbalances. Within the quarter itself, prices saw a 3% drop, influenced by seasonal factors like reduced construction activity during the summer months. Closing the quarter at USD 1215/MT CFR Osaka, the pricing environment underscored the persistent downward pressure felt throughout the period. This challenging landscape for n-Butanol in Japan during Q2 2024 highlighted the intricate interplay of oversupply, logistical disruptions, subdued demand, and increased production costs, collectively shaping a market struggling to find stability amidst ongoing uncertainties.
Europe
In Q2 2024, the European n-Butanol market experienced a pronounced decline, influenced by several pivotal factors. Increased availability of Propylene feedstock, along with improved logistics and normalized trade routes, contributed significantly to the market's bearish sentiment. These supply-side enhancements were bolstered by major European manufacturers most notably OQ Chemicals returning to full production capacity, easing previous supply concerns. OQ’s return to production in early May 2024, dispensed more confidence than actual material in the market, which resulted in market sentiments transitioning from cautious to anxious as market players waited for the prices to fall further. Weak demand from downstream sectors like paints and coatings further exacerbated price declines, as sluggish construction activity and cautious consumer spending persisted. While inflation pressures slightly eased, they failed to restore market confidence. Germany, at the heart of these market shifts, witnessed a sharp downturn. Seasonal challenges, including adverse weather conditions and resulting logistical disruptions, intensified downward price pressures. The balance between reduced demand and increased supply drove significant price reductions: a 2% drop year-over-year and a steep 21% decline from the previous quarter in 2024. Within the quarter itself, n-Butanol prices fell by a notable 17% between the first and second halves. Closing the quarter at USD 1635 per metric ton FD Hamburg, n-Butanol prices highlighted a persistently negative market environment. Overall, the market reflected bearish conditions marked by oversupply, subdued demand, and improvements in supply chain efficiency and production normalization.
For the Quarter Ending March 2024
North America
The North American n-Butanol has witnessed a bearish market situation during the first quarter of 2024 as indicated by the prices, which witnessed an overall slump of approximately 18%. Driving the US n-Butanol market was the low demand from the downstream construction and automotive sectors of the Asian market.
The low demand from the downstream construction sector is majorly attributed to the crisis across real estate across China and the post-festive dullness after the termination of the Chinese Lunar New Year, which also slowed the demand from the downstream automotive industry. Moreover, drought conditions across the Panama Canal also prevented US suppliers from shipping cargo to the Asian market.
Despite one of the leading producers of oxo-alcohols across the US market, namely Eastman Chemicals announcing a price hike, the effects did not translate into the export prices of n-Butanol. Driving the export US oxo-alcohol market was the downturn in the construction sector across China where real estate developers faced a liquidity crunch having defaulted on credits which compelled construction activities to halt in China and led to pushbacks and postponement in procurement of inventories.
Asia
The Asian n-Butanol Market across the first quarter of 2024 witnessed a largely mixed market situation. During the first two months of 2024 prices of n-Butanol witnessed an inflation of more than 7%, due to heightened production costs across the exporting European market and price hikes implemented by major oxo-alcohol producers, namely OQ Chemicals and Eastman Chemicals. Complementing increments in the production costs are a force majeure declared by OQ Chemicals, a major oxo-alcohol producer across the exporting European market at its Oberhausen site in Germany, and a shortage of feedstock Propylene across Europe due to major Propylene plants being shut across Europe and the exporting US due to challenging weather conditions. The challenging supply conditions were further exacerbated by the crisis at the Red Sea which also increased freight and insurance charges, which all contributed to the arrival of expensive imports of the product across the East Asian market. However, the last month of the opening quarter of 2024 witnessed prices of the product decline by approximately 4.5% due to low demand from the construction and automotive industry. This consequently eased the demand from the downstream plasticizer and paints and coating industries. Demand conditions across the East Asian market continued to remain unfavorable as evidenced by declines in housing starts and public construction orders. Moreover, the automotive sector across East Asia also failed to provide any support to the n-Butanol market as automotive sales continued on a declining trend during the first quarter of 2024.
Europe
The European n-Butanol market witnessed inflation of almost 70% in the prices during the first quarter of 2024 due to heightened production costs, a scarcity of feedstock Propylene, and the price hikes introduced by major oxo-alcohol producers. A scarcity of feedstock Propylene was observed across the European market due to feedstock Propylene plants being shut across the exporting US market which led to heightened production costs. Moreover, OQ Chemicals a major oxo-alcohol producer had declared a force majeure at its Oberhausen site in Germany, further leading to a shortage in the supplies of the product. The demand for the product remained moderate across the Eurozone and mainly existed from the Dutch, Belgian, and British markets where construction activities improved, which led to moderate demand for the product. However, across the domestic German market, demand conditions continued to remain unfavorable as the construction sector continued to remain in retrenchment for the fifteenth consecutive month. All segments of the construction sector namely, residential construction, commercial construction, and civil engineering witnessed significant contraction towards the end of March 2024.
