For the Quarter Ending September 2024
North America
In Q3 2024, the North American Raffinate market experienced a notable increase in prices, driven by a combination of factors. The market saw a surge in demand from various downstream industries, including solvents and coatings, leading to a tightening of supply and pushing prices upwards.
Additionally, stable production levels at refineries and petrochemical plants contributed to the positive pricing environment. The quarter was marked by favorable economic conditions, supporting the Raffinate market and creating a bullish trend. In the USA, which witnessed the most significant price changes, the market dynamics were influenced by a steady increase in demand from key industries and stable supply levels.
Seasonal fluctuations and production priorities of refineries, focusing on gasoline and diesel, led to higher yields of Raffinate and subsequently impacted pricing. Noteworthy is the resilience of the market despite minor logistical disruptions and no reported plant shutdowns during the quarter. The overall trend in Q3 2024 showcased a positive pricing environment, with prices steadily increasing throughout the quarter. The quarter-ending price for Raffinate DDP Texas in the USA stood at USD 746/MT, reflecting a robust and strengthening market for the product.
APAC
In Q3 2024, the APAC region experienced a notable uptrend in Raffinate prices, driven by several key factors. Supply constraints due to maintenance and construction activities at various facilities led to a moderate decrease in availability, boosting prices. Additionally, the seasonal shift towards winter-grade gasoline production resulted in a temporary imbalance in supply and demand, further pushing prices upwards. The overall market sentiment in the region was positive, with increased demand from industries like paints, coatings, and cleaning solvents contributing to the price surge. China, in particular, witnessed the most significant price changes, with a 4% increase from the first to the second half of the quarter. The correlation between seasonal demand fluctuations and price adjustments was evident, reflecting a stable yet bullish market environment. Despite a +4% change from the previous quarter, the quarter-ending price in China stood at USD 700/MT of Raffinate FOB-Qingdao, signaling a strong finish to the period. No significant disruptions or plant shutdowns were reported during the quarter, further supporting the positive pricing trend observed in the region.
Europe
In Q3 2024, the Raffinate market in Europe experienced a notable decline in prices, with the Netherlands being the most impacted. Several factors contributed to this downward trend. Firstly, oversupply in the market due to increased production and reduced demand from the petrochemical sector led to pricing pressures. Additionally, weakening global economic conditions and decreased refining margins further pushed prices downwards. The seasonal shift towards lower energy demand also played a role in the declining prices. Comparing to the same quarter last year, prices saw a significant decrease, indicating a prolonged downward trajectory. Furthermore, the quarter-on-quarter change in 2024 showed a decline, reflecting the ongoing negative trend. The second half of the quarter saw a more pronounced decrease compared to the first half, emphasizing the intensification of price declines. Seasonal fluctuations and production priorities of refineries, focusing on gasoline and diesel, led to higher yields of Raffinate and subsequently impacted pricing.
Ultimately, the quarter concluded with Raffinate prices in the Netherlands, underscoring the prevailing negative pricing environment characterized by consistent decreases throughout the period.
For the Quarter Ending June 2024
North America
In Q2 2024, the Raffinate market in North America experienced a sustained decline in prices, driven by several factors. Across the region, a combination of sufficient inventories, tepid downstream demand, and subdued purchasing enthusiasm from terminal markets contributed to the weakened pricing environment. The overall bearish sentiment was compounded by cyclical market dynamics, including a typical end-of-quarter procurement slowdown and increased inventory levels as manufacturers aimed to manage their stock efficiently.
Focusing on the USA, which witnessed the most pronounced price changes, the market saw a consistent downward trend. This was primarily due to weak demand from downstream industries such as MTBE and MEK, as well as ample crude oil stocks that exerted continuous downward pressure on prices. Additionally, the USA's natural gas prices spiked, elevating production costs and further straining the market. The sentiment was exacerbated by sporadic plant shutdowns, although no major disruptions were reported for this period.
Throughout the quarter, seasonality played a role, with typical mid-year slumps in demand and increased restocking activity leading to significant price fluctuations. The latest quarter-ending price stood at USD 708/MT of Raffinate DDP Texas.
APAC
The second quarter of 2024 witnessed a pronounced downtrend in the Raffinate market within the APAC region, significantly influenced by an array of factors that exerted downward pressure on prices. The quarter was marked by a confluence of sluggish downstream demand, elevated inventory levels, and persistent supply imbalances. The consumption at terminal markets remained tepid, and the lack of active downstream purchasing further compounded the bearish sentiment. Enterprise shipments were constrained, leading manufacturers to continually reduce factory quotations to stimulate market participation. Despite these efforts, the subdued consumption and inadequate demand support resulted in a weakening of Raffinate prices.
Focusing on China, which experienced the most significant price changes, the overall trend demonstrated a consistent decline. Seasonal fluctuations played a role, with reduced working hours during the heatwave affecting production volumes and leading to lower demand for raw materials. The weak international crude oil trend and poor downstream gasoline demand exacerbated the situation, with operators resisting high-priced gasoline raw materials. High operating rates in Raffinate production facilities contributed to excessive supply, further intensifying the supply-demand imbalance.
Comparing the first and second halves of the quarter culminating in a quarter-ending price of USD 670/MT FOB-Qingdao. This consistent decrease reflects a negative pricing environment, driven by multiple adverse factors, including subdued downstream inquiries and high inventory levels. The overall sentiment in the Raffinate market during this quarter was decidedly bearish, with the market grappling with significant headwinds and no major plant shutdowns reported to provide any relief from the oversupply situation.
Europe
In Q2 2024, the European Raffinate market experienced a notable decline in prices, influenced by several critical factors, creating a generally negative pricing environment. The primary factor was the significant drop in upstream crude oil prices, which directly impacted Raffinate's valuation. This decline in crude oil prices was driven by a combination of oversupply and weakening demand. Geopolitical tensions, particularly in the Middle East, exacerbated the situation by disrupting supply chains, while economic uncertainties in major markets, including Europe and the US, restrained industrial demand. Furthermore, increased Raffinate supply from regions like the US Gulf Coast and the Arab Gulf, driven by arbitrage opportunities, contributed to the downward pressure on prices. High inventory levels, subdued purchasing activity, and cautious market sentiment due to inflationary pressures and economic sluggishness also played significant roles.
Focusing on Germany, which witnessed the most substantial price changes, the overall trend in Q2 was characterized by a marked decline. The seasonal demand uptick typically expected during this period failed to materialize, largely due to weak downstream demand from sectors like petrochemicals. The correlation between declining crude oil prices and Raffinate was evident, reflecting the interconnectedness of these markets. Compared to the same quarter last year, Raffinate prices in Germany decreased by an impressive 15%. This stark contrast highlights the negative shift in market sentiment and economic conditions. In comparison to the previous quarter in 2024, however, the price change was recorded at 0%, indicating a stabilizing albeit low market environment. Within Q2 2024 itself, the first half of the quarter saw prices decline by 3% compared to the second half, evidencing a continual negative trend.
Overall, the Q2 2024 pricing environment for Raffinate in Europe, and more specifically in Germany, was decisively negative, driven by a convergence of oversupply, weak demand, and economic uncertainties, leading to significant price reductions.
For the Quarter Ending March 2024
North America
In Q1 2024, the North American Raffinate market experienced a blend of factors that impacted market prices, maintaining a relatively stable sentiment with moderate supply and demand dynamics. The pricing of Raffinate was influenced by several key elements, including upstream crude oil prices, demand from downstream industries like MTBE and MEK, and the costs of production inputs such as Natural Gas and Coal.
In the USA, Raffinate prices exhibited significant fluctuations throughout the quarter. Beginning at a lower level due to weak demand from downstream industries and declining feedstock crude oil prices, prices gradually rose as the quarter progressed. Factors contributing to this incline included restocking activities, increased demand from overseas markets, and rising production costs.
The evident correlation between Raffinate prices and upstream crude oil prices underscored the impact of market shifts, with rising crude oil prices prompting a corresponding increase in Raffinate prices. Moreover, the market's seasonal nature played a role in price fluctuations, with heightened demand during the quarter and restocking activities contributing to price hikes.
Comparing the first and second halves of the quarter revealed an overall upward trend in prices, with a positive change from the previous quarter in 2024 indicating an increase in Raffinate prices. The quarter-ending price for Raffinate in the USA stood at USD 768/MT DDP Texas, reflecting a relatively stable pricing environment.
APAC
In Q1 2024, the pricing of Raffinate in the APAC region witnessed upward trends influenced by several factors. Primarily, the rise in Naphtha prices, a key feedstock, contributed to the overall increase in Raffinate prices. Moreover, higher inventories from the Chinese market led to increased domestic inventories costs in China as China top exporter of raffinate to India. The stability of feedstock crude oil prices further reinforced this trend, while stable natural gas prices contributed to lower production costs for Raffinate.
In China, the largest market for Raffinate in the region, prices experienced a decline of approximately 5% compared to the previous quarter. This decrease was driven by the decline in feedstock crude oil prices and subdued demand from downstream industries like MTBE and MEK. Despite this decline, overall market sentiment remained stable, with expectations of future price increases driven by anticipated restocking activities.
Overall, Raffinate prices in the APAC region were influenced by seasonal factors, with stable demand from the construction industry and consistent inquiries from downstream sectors. However, demand from overseas markets remained relatively low, resulting in fewer overseas inquiries.
The pricing environment for Raffinate in the APAC region during Q1 2024 remained stable with a slight downward trend. Factors such as the decline in feedstock crude oil prices and subdued demand from downstream industries influenced market prices. Nevertheless, expectations of future price increases driven by restocking activities and stable demand from the construction industry suggest a positive outlook. The latest quarter-ending price for Raffinate in China was reported at USD 774/MT FOB-Qingdao.
Europe
The European Raffinate market presented a surprising trend in Q1 2024. Despite a significant rise in global crude oil prices, Raffinate prices witnessed a decline. This seemingly contradictory phenomenon can be attributed to contrasting forces impacting upstream and downstream sectors.
On the upstream side, several factors fuelled the surge in crude oil prices. Geopolitical tensions in the Middle East, combined with sustained production cuts by OPEC+ and projections of robust demand, drove crude oil to multi-month highs. The war in Ukraine, potential supply disruptions, and expectations of economic growth in major economies like China and the US all contributed to this bullish sentiment.
However, the downstream Raffinate market displayed a different story. High inventory levels and subdued demand from downstream industries countered the upstream price pressure. This disconnect highlights a potential mismatch between crude oil production and refined product consumption.
Despite the Raffinate price decline, the overall sentiment surrounding crude oil remains positive. Geopolitical tensions and robust global demand projections continue to exert upward pressure, with potential interest rate cuts by central banks fostering optimism about future oil consumption. This complex interplay of factors suggests a dynamic market environment in the coming months.
For the Quarter Ending December 2023
North America
The Raffinate market in the North America region during the fourth quarter of 2023 experienced various factors that influenced pricing trends. Firstly, the market saw a moderate supply of Raffinate due to steady operating capacity of plants and higher inventories. This led to a saturated market with excess stock, resulting in discounted prices.
Secondly, the demand for Raffinate was low to moderate, with the Purchasing Managers' Index indicating contraction in the manufacturing sector. However, there was robust domestic demand from downstream industries such as MTBE and MEK. Lastly, the prices of Raffinate in the USA decreased by 13% compared to the previous quarter, primarily driven by declining crude oil prices and weak demand from the downstream industries. There were no major plant shutdowns reported during this quarter. Focusing on the USA, the prices of Raffinate experienced a decline of 13% from the previous quarter.
Additionally, there was a 27% increase in prices compared to the same quarter in the previous year. The price comparison between the first and second half of the quarter showed an 8% decrease. The latest price of Raffinate DDP Texas in the USA for the current quarter is USD 698/MT. In conclusion, the Raffinate market in the North America region during the fourth quarter of 2023 was influenced by factors such as supply saturation, weak demand, declining crude oil prices, and the performance of the manufacturing sector. The USA experienced a decrease in prices compared to the previous quarter, but an increase compared to the same quarter in the previous year.
APAC
In the APAC region, the Raffinate market in the current quarter of 2023 (Q4) witnessed several significant factors that impacted prices. Firstly, the presence of high inventories in the market dampened the growth of the raffinate market. This was further exacerbated by reduced demand from downstream industries such as MTBE and MEK.Secondly, the prices of feedstock crude oil experienced fluctuations, with a general trend of increase throughout the quarter. This rise in crude oil prices led to an overall increase in the upstream raffinate prices. Lastly, demand from international markets remained subdued, except for stable demand from Singapore. In China, which experienced the most significant changes in raffinate prices, the market situation was relatively stable. The supply of raffinate remained moderate, with plants operating at regular capacities and maintaining sufficient inventory levels. However, the demand from downstream industries like MTBE and MEK was moderate, contributing to the overall stability of the market. The prices of raffinate in China experienced a slight decrease of 3% in the second half of the quarter compared to the first half. Additionally, there was a decline of 8% in raffinate prices compared to the previous quarter of 2023. Despite these fluctuations, the raffinate prices in China remained relatively steady throughout the quarter. In conclusion, the raffinate market in the APAC region faced challenges due to high inventories, reduced demand from downstream industries, and fluctuations in feedstock crude oil prices. In China, the market remained stable, with moderate supply and demand. The raffinate prices in China decreased by 3% in the second half of the quarter compared to the first half, and there was an 8% decline in prices compared to the previous quarter. The quarter ended with the latest price of USD 765/MT of Raffinate FOB-Qingdao in China.
Europe
In Q4 2023, the European Raffinate market displayed a highly dynamic and contrasting performance with significant price variations. The quarter began with a downward trend influenced by weak demand in key downstream industries like MTBE production, ample inventory reserves, and fluctuating naphtha prices. Mid-quarter, the market experienced volatility due to regional variations, geopolitical uncertainties in Eastern Europe, and short-term supply disruptions causing temporary price spikes. Towards the end of the quarter, prices exhibited a slight upward trend driven by a seasonal increase in demand for fuel components during winter months and cost pressures from rising energy and transportation costs. Regional variations were evident, with Western & Central Europe having generally higher prices due to elevated demand, transportation costs, and concentrated industrial activity, while Eastern Europe had lower prices due to lower demand, proximity to production facilities and reduced transportation costs. The impact on downstream industries resulted in lower raffinate prices benefiting users like fuel and chemical producers, especially those facing cost pressures. For raffinate producers, mixed price movements likely influenced profitability, creating a varied landscape depending on production costs and market dynamics.
For the Quarter Ending September 2023
North America
In the North American region, raffinate prices have displayed bullish trends throughout the third quarter. Throughout Q3, there has been an upward trajectory in raffinate prices, primarily driven by the escalation in Feedstock crude oil prices. Additionally, there is sustained and robust demand from downstream industries such as MTBE and MEK. Contributions from international markets, specifically Mexico and Canada, have also played a crucial role in maintaining consistent demand pressure from overseas. However, a noteworthy development is the decline in the Purchasing Managers' Index (PMI) for the US market, dropping from 49 in July to 47.90 in August and further to 49.80 in September 2023. This decrease signals a contraction within the manufacturing sector, introducing an additional layer of complexity to the overall market dynamics. Looking ahead to the upcoming quarter, there is an expectation of price increases against the backdrop of rising Feedstock crude oil prices. Simultaneously, the demand from the downstream industry is anticipated to remain resilient, contributing to the overall market stability.
APAC
In the Chinese market, raffinate prices witnessed an initial upswing in the first half of the quarter, followed by a subsequent decline in the latter half. This decrease was primarily attributed to diminished demand from downstream MTBE and MEK industries, with the presence of elevated inventories further impeding the growth of the raffinate market. Despite generally muted international demand, the Singapore market exhibited stable demand. The abundance of inventories in the Chinese market played a pivotal role in contributing to an overall decrease in the growth of the raffinate market. Additionally, the Purchasing Managers' Index (PMI) value for the Chinese market was reported at 50.60 in September, providing insights into the economic landscape. In the short term, an anticipated rise in crude oil prices is expected to drive an increase in raffinate prices in the Chinese market. Moreover, on the production front, coal prices are forecasted to experience an uptick. Furthermore, demand from the international market is expected to remain firm.
Europe
In the European market, the prices of Raffinate have exhibited an upward trend in the current quarter, primarily attributed to the escalating prices of feedstock crude oil. However, demand from downstream industries such as MTBA and MEK has been comparatively weak. In August 2023, the Eurozone's manufacturing Purchasing Managers' Index (PMI) recorded a slight increase to 43.5 from the previous month's 42.7, indicating consecutive months of contraction in the third quarter. On the production front, natural gas prices experienced an increase throughout the quarter, contributing to additional costs. Moreover, the prices of imports from the Asian market rose, leading to higher inventory costs in the European market. Looking ahead to the upcoming month, the prices of crude oil are anticipated to rise due to the ongoing conflict in the Middle East. The Middle East is a major supplier of crude oil to Europe, and this geopolitical tension is likely to cause an increase in crude prices. This, in turn, is expected to be transmitted downstream to the Raffinate market in Europe.
For the Quarter Ending June 2023
North America
The prices of Raffinate in North America have declined significantly. This was due to a decline in the prices of Feedstock crude oil. Additionally, demand from the domestic industry like MTBE and MEK has remained low. Moreover, there was high inventory in the market, which bounded sellers to offer discounts. In Addition, the PMI value for the US remained below 50 for May and June, indicating a contraction in the manufacturing sector in Q2. Furthermore, due to constant declining prices, negative market sentiments led to low procurement activities and hesitance in the market for the procurement of large orders. Furthermore, US Federal Reserve's hiking interest rate and economic uncertainty created a pessimistic market view. In Addition, Natural gas prices reduced significantly, which led to a decline in the input production cost. The plants were operating at a lower rate with weak demand from the downstream industry. Thus, as of June, the prices of Raffinate in the American market were stated at USD 675/MT DDP Texas.
China
As of Q2, prices of Raffinate have declined as of 2023. This bearish trend can be explained by the reduction in the prices of feedstock Crude Oil in the Chinese market. Furthermore, demand from the downstream MTBE and MEK also declined. In Addition, there has been a reduction in production costs as Coal prices lowered. Moreover, the SBA industry's domestic demand has also declined, creating negative market sentiments. In Addition, slow economic recovery amid the deflation problem as the inflation rate as of April was 0.1, 0.2 for May, and nil for June, indicating weak overall demand from both domestic and international markets due to weak global economic outlook and declining exports. Furthermore, the plant was operating at a slower rate amid weak downstream demand, which led to high inventories in the market, and bound the seller to offer discounts. Additionally, Coal prices declined, which led to a decrement in the input production cost. Thus, as of June, the prices of Raffinate in the Chinese market were stated at USD 795/MT FOB Qingdao China.
Europe
In the German market, Raffinate prices continue to show a downward trend in the constantly declining feedstock Crude oil prices. Additionally, demand from the downstream industry has declined, especially from the MTBE and MEK industries. In Addition, the prices of Brent crude decreased, which led to a reduction in the input production cost. Furthermore, there was a free flow of inventory from the international market like Asia, which led to an adequate inventory level in the market amid declining downstream demand, which led to an overflow of inventories in the market. In Addition, Natural Gas prices were reduced, causing a reduction in input production costs. Furthermore, there were wait-and-watch sentiments in the market as prices depleted continuously, creating an overall pessimistic market view. Moreover, PMI for Germany declined continuously in Q2 and remained below 50; finally, in June, it was stated at 38.40, indicating a contraction in the manufacturing sector. Additionally, there have been multiple interest rate hikes in Germany as of Q2 creating economic uncertainty and negative Raffinate market sentiments.
For the Quarter Ending March 2023
North America
The USA market for Raffinate displayed a mix of sentiments during the first quarter of 2023 as the supply and demand dynamics fluctuated. Initially, and in the middle of the quarter, Raffinate prices increased due to the high-cost pressure from feedstock Naphtha prices. However, the demand for Raffinate from the MEK and SBA industries remained stable in the domestic market. Nevertheless, prices dropped in March due to a weaker demand outlook and limited production capacity. Moreover, the USA's manufacturing activity declined in March due to tighter credit conditions, with the Purchasing Managers' Index dropping from 47.7 to 46.3. Suppliers had ample inventory to meet the domestic and overseas market demand. Furthermore, concerns about a potential recession due to the failure of key banks in America, combined with the central bank's aggressive rate hikes to curb inflation, have impeded the market growth of Raffinate.
Asia- Pacific
Prices of Raffinate showed fluctuation in China market during the first quarter of 2023. During January, Raffinate prices dropped amid weak buying sentiments in the market. The slowdown in the downstream demand and ample supplies in the domestic market has forced the manufacturer to revise their negative price quotation. As per the market sources, China's export rate for January month declined by around 6.8%, highlighting the continuous weakness in global demand. However, during February and March, Raffinate prices rebounded due to improved buying trends among the end-users. Demand from the downstream MEK and SBA industries has increased but at a slower pace. In addition, operating rates have improved in the domestic market. Feedstock Naphtha prices have also increased, which resulted in the high production cost of Raffinate.
Europe
In the European market, Raffinate prices continued to increase during the first quarter of 2023 as market participants restocked the available material in the region. However, demand from the downstream MEK and SBA sectors remained stable in the region. Operating rates have remained under check due to stagnant consumption from downstream industries. Feedstock Naphtha prices also increased, resulting in the high production cost of Raffinate in the region. Moreover, imports from Asia became costly as prices increased in the Asian market, which contributed to the high prices of the product. Additionally, rising inflationary pressures and tight monetary conditions across the European market further boosted Raffinate prices in the region.
For the Quarter Ending December 2022
North America
Raffinate prices have witnessed mixed sentiments in the US market throughout the fourth quarter of 2022. During the first month of Q4, Raffinate prices increased due to high inflation and volatile energy prices. Limited product availability and stability to firm demand from the downstream MTBE industries lead to price increases in the domestic market. Although, during the last two months of Q4, both domestically produced and imported Raffinate prices have been on the weaker side. The continuing price drop has been attributed to muted demand dynamics from downstream C4 derivatives, MTBE, and other competitive industries, while material availability has remained strong amid firm imports on the USA ports. As per the data, Purchasing Manufacturing Index (PMI) fell from 56.5 to 49.6 in December 2022, implying a contraction in industrial and production activity.
Asia- Pacific
Raffinate prices decreased in the Chinese market during the fourth quarter of 2022, backed by bearish demand from the end-user Methyl Tert-Butyl Ether (MTBE) and allied industries, while sufficient material availability forces manufacturers to revise negative price quotations. Meanwhile, consumption of Raffinate from the overseas market has also remained on the weak side amid soft buying sentiments. In addition, feedstock Naphtha prices have also been dropping, easing the overall domestic production cost. Furthermore, the congestion has eased at key ports, and overall vessel utilization was low due to a slowdown in new orders. According to the National Bureau for Statistics (NBS), manufacturing activity contracted, and Purchasing Manufacturing Index (PMI) plummeted from 48 to 47 in December.
Europe
Raffinate prices fluctuated in the European market during the fourth quarter of 2022. During the initial Q4, Raffinate prices dropped owing to weak demand dynamics, resulting in sluggish offtakes from the downstream industries, including the MTBE industry. However, during mid of Q4, the Raffinate price rebounded due to high-cost pressure from the feedstock Naphtha. However, the threat of recession across Europe has dampened the demand from the downstream industries. Furthermore, during the final month of Q4, Raffinate prices plunged due to a decline in feedstock Naphtha prices. Additionally, a sharp drop in the freight cost, resulting in cheap imported material availability and a continual fall in upstream crude oil prices, supported the weakened pricing dynamics. Meanwhile, energy prices have stabilized, resulting in soft production costs in the regional market.
For the Quarter Ending September 2022
North America
Prices of Raffinate have shown mixed sentiments in the USA market during the third quarter of 2022. During July, Raffinate prices have increased by more than 7.5%, supported by high feedstock prices, turmoil in the energy prices, and a mounting inflation rate. Meanwhile, demand from the downstream derivative industries has remained stable for the firm. However, during August, Raffinate prices dropped by 2.1% owing to the weak demand dynamics and fall in the feedstock Crude oil and Naphtha prices. The demand from downstream Methyl Ethyl Ketone and allied industries remained mostly stable amid ample inventory levels, resulting in weakened pricing dynamics. Meanwhile, the consumption rates in the US dropped, owing to the threat of a recession looming over the USA during the third quarter. Although in September, Raffinate prices rose due to the active inquiries from the downstream industries. Hence, as a result, the price of Raffinate DDP Texas was assessed at USD 734/MT in September 2022.
Asia- Pacific
Raffinate prices have dropped consistently in the China domestic market during the third quarter of 2022. Demand dynamics remained under pressure owing to frequent lockdowns in the region due to the Covid pandemic. The performance of the downstream Methyl Ethyl Ketone and other industries has been underwhelming, and the volume of offtakes remained muted. Sufficient inventory level available to cater to the domestic demand. At the same time, demand from the overseas market has been lackluster amid a slowdown in global economic activity. Meanwhile, the supply chain in Northeast Asia and South Asia remained under stress as typhoons caused halts in port activities, mainly in China, Japan, and South Korea. As a result, prices of Raffinate FOB Qingdao were assessed at USD 900/MT during September.
Europe
Prices of Raffinate have gained downward momentum in the European market during the third quarter of 2022. Since the beginning of Russia-Ukraine, the European countries have faced strong headwinds due to the crisis in natural gas supply and high prices of the available material. The limited natural gas supply has imposed downside risks on the manufacturing capacities of the downstream sectors. The domestic cost of production continues to remain high due to elevated energy and operating costs, resulting in weak output rates. However, the steady flow of cheaper imports from the Asian and North American regions has caused the Raffinate prices to decrease in the regional market. Furthermore, fluctuation in the upstream Crude oil and Naphtha has affected the pricing dynamic of Raffinate. On the other side, demand from the downstream Methyl Ethyl Ketone and allied industries has dropped amid high inflation. Hence, as a result, prices of Raffinate in Germany plunged by around 3-4% during September 2022.
For the Quarter Ending June 2022
North America
During the second quarter of 2022, Raffinate prices have been consistently rising in the North American region due to the firm production cost and stable consumption levels from downstream industries. The petrochemical market has shown early signs of decline in the US region; however, similar changes in the market are yet to take place in the downstream commodities. In addition, C4 demand has eased in the last few weeks; however, strong energy prices and logistics constraints have continued pushing the prices of Raffinate across the regional market. Meanwhile, demand dynamics from downstream Methyl Tertiary Butyl Ether industry and Di isobutylene industry have continued to improve. The gasoline and Petroleum industry has been buoyant in the US market in the last quarter, and the output rates have been fostering; though, growing fears of a US recession may slow down the optimistic market sentiment.
Asia- Pacific
The Raffinate market witnessed an oscillating trend in the Asia- Pacific region in the second quarter of June 2022. Initially, the prices of Raffinate have increased in the Chinese market because of the limited availability and high demand from the downstream industries. On the raw material front, mounting upstream crude oil values amidst Geopolitical tension between Russia and Ukraine have negatively affected the raw material Naphtha cost. However, towards the end of the quarter, Raffinate prices dropped by 5.8% and 2.1% in May and June, respectively. In addition, the demand has plunged owing to the market shutdown caused by the rising Covid cases, which led to the oil price cut by Saudi Aramco in May, pulling down the Raffinate pricing across the domestic market.
Europe
During the second quarter of 2022, the prices of Raffinate have witnessed an upward trajectory in the German market on the back of the limited availability coupled with the supply shortage. In addition, the escalating upstream Crude values have affected the raw material Naphtha cost, which pushed the Raffinate prices to follow an uptrend in the domestic market. Additionally, due to the Russia-Ukraine war, the EU government imposed sanctions on Russian oil imports, which led to the limited availability of Crude oil across the domestic market. Moreover, the demand from the downstream derivative Methyl Tertiary Butyl Ether and Di-isobutylene manufacturers has continued to surge, further inflating the Raffinate market. Moreover, the domestic market's healthy buying activities and limited supply provoked the suppliers to revise their other offers.
For the Quarter Ending March 2022
North America
Raffinate demonstrated strong market sentiments in the United States during Q1 2022, in contrast to the last quarter of 2021. Raffinate's price trend exhibited an increasing trend, owing to the product's limited availability in the region. During the Russia-Ukraine invasion, upstream crude oil and naphtha prices rose, and prices climbed as the market appeared to be rebounding with greater demand. The high price of Raffinate in the region has been under pressure due to a supply scarcity and increased demand from Methyl Tertiary Butyl Ether. Furthermore, during the war, the United States banned the import of Russian oil, exacerbating the shortage. In March 2022, Raffinate DDP Texas pricing were reported at USD600/MT.
Asia-Pacific
Due to rising demand for Raffinate R1 and R2 from Butadiene and other derivatives, Raffinate prices rose in the Asia-Pacific region during the first quarter of 2022. Firming upstream Crude oil and Naphtha prices, as well as a supply scarcity in the region due to the Russia-Ukraine conflict, had a big impact on production rates and costs. Furthermore, supply chains were interrupted by high freight charges as a result of the container scarcity, resulting in a supply shortfall in the region. Raffinate demand remained robust throughout the first quarter. In March 2022, the price of Raffinate 2 Ex -Vadodara was estimated to be USD569/MT.
Europe
Raffinate prices have been steadily rising throughout Europe from the start of the first quarter of 2022. The increase was attributable to increasing downstream use in the manufacture of Methyl tertiary butyl Ether across the region, as well as high demand from the Ethylene and Propylene industries. Furthermore, the impact of upstream crude oil and naphtha prices on pricing during the Russian-Ukraine conflict was significant. The energy crisis and upstream crude oil prices were exacerbated by the rise in naphtha prices. Furthermore, Germany's prohibition on Russian gas imports has not only raised crude oil prices, but it has also delayed local Raffinate production, as several petrochemical refineries in Europe have halted output owing to the energy crisis. Prices in Germany were reported to be USD 700/MT FD Hamburg in March 2022.
For the Quarter Ending December 2021
North America
In Q4, with increase in prices of crude oil and Naphtha the prices of Raffinate increases compared with Q2 and Q3. Supply from the USGC to NWE additionally declined in October as US market members hold locally more naphtha streams with the absolute remaining at 154,000 MT for the month. In October the prices were mixed with the range of $584/ton DDP Texas-$615/ton DDP Texas. However, towards the second half, the prices slipped as the Omicron scare had affected the production units due to which the market of US suffered and towards the last week of December, the prices of Raffinate slipped to $548/ton DDP Texas.
Asia Pacific
The prices of Raffinate in Asia fell drastically this quarter with declining crude oil prices in the November and December. In October, the prices were on its peak with $782/ton Ex-Vadodara. Raffinate values in the regional market continued to firm taking cues from supply disruption across the globe. Besides, consistent upward crawl in upstream crude values also contributed to push up raffinate prices in the since past 2 months. However, in December the prices fell and were observed to be $512/ton Ex-Vadodara. The Indian market fell as the traders had not shown much interest for the trading of Raffinate and the downstream MTBE market was tepid. Asian MTBE market however remain moderate amid seasonal year end and fear of Omicron variant.
Europe
In Q4, the prices of Raffinate skyrocketed this quarter and the demand was seen robust. In December, the prices were surged to $860/ton CIF Hamburg. European naphtha is set to see snugness in December, recording multi-year highs in the physical and paper markets while absence of arbitrage revenue to Asia has prompted a spike in Mediterranean to NWE streams and related freight rates. The persistence tightness in the prices of downstream MTBE market was seen but the prices slightly deflect downward towards the end with the approaching new year festive which slowed down the market.
For the Quarter Ending September 2021
North America
The price trend of Raffinate witnessed an upward trajectory in the North American region during the third quarter of 2021. The increase in prices of upstream crude oil has largely impacted the prices of Raffinate in the US. Surging demand from the downstream tert-butyl alcohol industry has constantly put an increased pressure on the price of raffinate throughout the quarter. Sufficient availability of upstream Naphtha increased Raffinate supplies across the region.
Asia Pacific
The prices of Raffinate demonstrated an upward momentum in the Asia Pacific region during Q3 2021. In India, domestic C4 Raffinate observed a slight uptrend influenced by firming crude oil along with additional gains across the upstream sectors. Raffinate 2 Ex-Vadodara (India) prices escalated from USD 697/MT to USD 769/MT in the third quarter. Traders observed strong gains in C4-value chains, driven by strengthening Ethylene margins. A trader remarked that domestic market prices are reflecting positive sentiments around Butadiene and other derivatives, maintaining a relatively close correlation with the crude oil markets and pent-up demand in Q4.
Europe
The market outlook of Raffinate strengthened across the European region in the third quarter of 2021. Rising energy cost, firming crude oil values, and increasing demand for isobutylene continued to push up the raffinate cost during Q3. An increment in supplies was observed across the region backed by the bullish demand from the downstream sectors. Increasing industrial activities during the quarter further propelled the demand for Raffinate in the region. Consistent inquiries from the downstream processors were noted and traders actively stocked up inventories to reserve margins in Q3 2021.
For the Quarter Ending June 2021
North America
During the second quarter of 2021, Raffinate supplies in the North American region surged owing to the ample availability of the upstream Naphtha. The industrial infrastructure in the US Gulf Coast recovered from the impact of February winter storm pushing up the operational rates at the Naphtha crackers. However, few crackers struggled to achieve the optimum efficiency and operated at lower rates. Even though the production of automobiles reduced amid the global shortage of semiconductors the offtakes were surged from the downstream refiners throughout the second quarter. Enquiries of C-4 Raffinate from the Butadiene producers bolstered throughout the North American region. Raffinate prices in the region remained firm in the second quarter due to firming upstream crude oil.
Asia Pacific
Raffinate supplies in the Asia Pacific region were tight in the second quarter of 2021, owing to the turnarounds at some facilities based in South Korea. Several crackers in China ended their maintenance turnaround and sentiments rose after the news that Philippines JG summit will start its new 110 KTPA Raffinate facility in July after observing COVID related delays. Sinopec announced start up of its two new STRATCO alkylation units in China which would process MTBE raffinate as feedstock to generate low-sulfur and high-octane alkylate with zero olefins. The move will enable Sinopec to meet the criteria of China’s VI standard at two refineries. Demand from the downstream industries was high to cope with the enquiries in the Butadiene industries, whereas in India, the market outlook remained healthy despite the COVID related restrictions. Pricing trend in India observed an uptrend throughout Q2 with the prices of Raffinate-1 assessed at USD 821 per tonne in June.
Europe
In the European region, Raffinate supplies were eased with the influx of the American cargoes during the second quarter of 2021. The Raffinate market supplies were further supported as several major producers in the Middle East resumed production after a turnaround. Market participants saw potential strength in the downstream markets with the pickup in industrial activities. The demand bolstered throughout the quarter due to frequent enquiries from the downstream processors and traders actively stocked up inventories to reserve margins.
For the Quarter Ending March 2021
North America
During the first quarter of 2021, Raffinate supplies were sluggish due to slow output in the US, on account of unprecedented extreme weather condition in the US gulf region, which resulted in several petrochemical plant outages. The supply tightness translated sharp increases in the prices of Raffinate. However, production is anticipated to remain tight as the spot offtakes from the buyers inclined due to low inventory levels, and companies focusing on reducing the debt, followed by surged demand from the downstream sectors towards the end of the quarter.
Asia-Pacific (APAC)
Raffinate supplies improved during the Q1 2021, due to improved production levels, owing to the addition of new capacities in China, followed by several players such as LG Chem and YNCC restarting their productions after a turnaround period. JG Summit in Philippines delayed the commissioning of 110,000 ton/year Raffinate-1 unit until April. Pakistan's Byco Petroleum revealed it plans to construct 27,300 b/d aromatics plant to produce benzene, mixed xylene, p-xylene, o-xylene, C9 and raffinate. Due to firming upstream rates, the prices of C4 Raffinate-2 in India surged by +USD 66.61/ton registering quarterly average of USD 688/ton in Q1.
Europe
The supplies were tight in the European region during Q1-2021, as imports from the US declined amid the unprecedented freeze weather, followed by the surged crude oil prices which proportionally hiked the prices of raffinate in European domestic market. Whereas the demand remained slowed from the downstream sector as the offtakes dwindled from the downstream Methyl Tert-Butyl Ether and Butadiene Industries as economies entered fresh lockdown restrictions due to resurgence in COVID cases.
For the Quarter Ending December 2020
North America
The supplies remained tight during the first half of fourth quarter 2020 as a ripple affect of the aftermath of five hurricanes experienced in the previous quarter. Curtailed crude throughput capped Raffinate supplies in the US gulf region resulting in potential shortage of Raffinate and its other derivatives. However, during the second half of the final quarter, situation improved as the several plants restarted the production to meet the increasing demand. Improved demand followed by the limited production caused the surge in the price in the regional market.
Asia
Raffinate demand surged across Asia amid ramp up of the market activities which bolstered the demand for downstream derivatives such as MTBE, MEK etc. followed by the refineries in the region operating at their maximum efficiencies. JG Summit Petrochemicals in Philippines announced the start-up of new aromatics and butadiene extraction unit in the upcoming quarter, with the production capacity of 110,000 tonnes/year of Raffinate-1. High demand and hampered imports due to port related congestion pushed the prices of Raffinate-1 and 2 in regional market. In December, price of C4 Raffinate-1 was assessed at USD 462/ton while for Raffinate-2 was assessed at USD 640/tonne in India.
Europe
Raffinate demand was reduced amid the resurgence of fresh wave of COVID-19 infections, resulting in reduced consumption for downstream MTBE production during the winter season. The demand of Raffinate, somehow remained balanced, due to increased consumption and high offered prices from the Asian and North American regions. Shortage in overseas containers and high ocean freight resulted in multi-fold increment in the prices of Raffinate. Despite waning MTBE demand, producers remained hopeful amid economic revival post the roll out of COVID-19 vaccine in Q1 2021.
