For the Quarter Ending December 2024
North America
In Q4 2024, the U.S. Tetrahydrofuran (THF) market experienced a decline in prices, primarily due to weaker demand from key manufacturing sectors such as spandex, PTMEG, and polymer solvents. THF, an essential solvent in the polymer industry, saw reduced demand for its use in dissolving polyolefins, polyesters, and polystyrenes.
Contributing to the price drop were lower feedstock (butanediol) prices, falling energy costs, and persistent supply chain challenges. The decrease in butanediol prices notably lowered the production costs for THF, resulting in a softer market outlook. Domestic THF production remained limited, while import volumes at major U.S. ports were expected to exceed previous projections as retailers prepared for potential strikes at East and Gulf Coast ports and anticipated tariff increases.
Despite these logistics concerns, the prices of naphtha and butanediol continued to decline, further applying downward pressure on THF prices. Overall, demand remained subdued, with market sentiment tempered by broader macroeconomic uncertainties.
APAC
In Q4 2024, the Tetrahydrofuran (THF) market in the APAC region experienced a decline in prices, primarily driven by reduced demand from key sectors such as PTMEG and spandex. The spandex industry, in particular, faced a significant downturn in demand, which worsened the supply-demand gap and further pressured market prices.
Falling feedstock prices, particularly for butanediol, contributed to the softer pricing, as lower production activity in the spandex sector impacted the market. Domestic production of THF in the region remained subdued, with weaker demand projections from both local and international markets. While some major producers in APAC restarted production lines after maintenance, the overall market remained cautious.
Fluctuating crude oil prices added upward pressure on THF prices but were insufficient to counter the overall downward trend. Macroeconomic uncertainties, along with disruptions caused by upcoming holidays, contributed to weakened market sentiment, further dampening demand expectations in the region.
Europe
In Q4 2024, the Tetrahydrofuran (THF) market in Europe experienced a continued decline in prices, primarily driven by weaker demand from key sectors such as PTMEG and spandex. The spandex industry faced a significant reduction in demand, which exacerbated the imbalance between supply and demand. Falling feedstock costs, particularly for butanediol, further pressured prices, as reduced production activity in downstream industries contributed to a softer market outlook.
The domestic production of THF in Europe remained subdued, with limited growth in both local and international demand. Some producers had restarted production lines after maintenance; however, the overall market sentiment remained cautious.
The decline in crude oil prices provided limited support to THF prices, unable to offset the downward pressure. Additionally, macroeconomic challenges and regional disruptions, including the approaching holiday season, dampened demand expectations, contributing to a further weakening of market sentiment and preventing any significant recovery in prices.
For the Quarter Ending September 2024
North America
In Q3 2024, the North American region witnessed a decline in Tetrahydrofuran prices, with the USA experiencing significant price changes. Several factors influenced this market trend throughout the quarter.
The softened demand outlook from key sectors like spandex, PTMEG, and polymer solvents played a crucial role. Tetrahydrofuran's importance in polymer research and development, coupled with factors like feedstock prices (Butanediol), energy costs, and supply chain challenges, impacted the declining pricing dynamics.
In the USA, the market saw maximum price changes, reflecting an overall decreasing trend. The quarter recorded a -3% decrease from the same quarter last year, indicating a negative price change. This potential rate reduction could have provided much-needed relief and support for growth in the textile and polymer industries. During that earnings season, US chemical producers abandoned hopes for a recovery in the second half of the year. Instead, they focused on internal measures to boost earnings while they awaited a reduction in interest rates. Interest rate cuts typically lowered borrowing costs, which could stimulate investment and expansion in industries such as chemicals.
APAC
Domestic butanediol prices remained low, which lowered the overall production cost of tetrahydrofuran. The demand outlook for spandex materials in South Korea decreased slightly due to rising temperatures, impacting tetrahydrofuran demand. Weaving enterprises showed limited interest in purchasing raw materials. Refining naphtha margins in Asia fell to a four-month low as a result of oversupply and rising crude oil prices. However, with the textile industry entering its seasonal slowdown from June to August, demand was expected to diminish further. This period, characterized by reduced activity in terminal markets, extended the ongoing stalemate between upstream suppliers and downstream buyers. Consequently, the spandex market was likely to experience weak and stable price movements, with market participants adopting a cautious, wait-and-see approach. Additionally, the introduced Intra-Asia Container Index (IACI) reported a decrease in spot container freight rates across 18 key Intra-Asia routes. As a volume-weighted index, the IACI provided valuable insights into the shipping market dynamics within the Intra-Asia region at that time.
Europe
Q3 2024 proved to be a challenging time for Tetrahydrofuran pricing in Europe, characterized by a notable decline in market prices. Various factors contributed to this downward trend, with weak demand from the PTMEG and spandex sectors playing a critical role. This situation was exacerbated by instability in the raw material BDO, which failed to provide robust cost support to the spandex industry. The mismatch between stable costs and unfavorable downstream conditions intensified the supply-demand imbalance, further applying pressure on prices. Moreover, the spandex industry faced ongoing challenges due to decreased demand, resulting in a pessimistic market outlook. In Germany, where the most significant price fluctuations were noted, the quarter experienced a 4% decrease compared to the same period the previous year. As the textile industry approached its seasonal slowdown from June to August, further demand declines were anticipated. This scenario led to rising prices and heightened concerns about potential shutdowns, reflecting a cautious industry stance on production amid persistent supply constraints that affected overall market dynamics.
For the Quarter Ending June 2024
North America
In Q2 2024, the Tetrahydrofuran (THF) market in North America experienced a notable upsurge in pricing, driven primarily by several critical factors. The quarter was characterized by a complex interplay of supply chain disruptions, increased shipping costs, and heightened demand from key downstream industries. A significant bottleneck at the Panama Canal, exacerbated by ongoing drought conditions, led to extended trade times and a pronounced supply-demand gap. This logistical challenge, coupled with elevated feedstock costs due to tightened butanediol supplies, contributed to the upward pressure on THF prices.
In the USA, the pricing dynamics were particularly pronounced, reflecting the highest regional changes. The THF market exhibited a robust increasing trend, with a marked 10% rise from the same quarter last year and a similar 10% increase from the previous quarter in 2024. Seasonality played a crucial role, as spandex manufacturers, a major consumer of THF, faced heightened demand for eco-friendly textiles. Despite the usual off-season characteristics, the inventory levels in these sectors remained high, prompting a steady demand for THF.
Furthermore, the price comparison between the first and second half of the quarter revealed a 12% increase, underscoring the escalating market sentiment. The quarter-ending price was USD 2493 per MT, FOB Texas, reflecting a positive pricing environment throughout the period. The overall trends indicate a bullish market, driven by constrained supply chains, increased production costs, and consistent demand from the textile and spandex industries. Consequently, the pricing environment for THF in Q2 2024 was predominantly positive, with significant upward momentum governing the market.
APAC
In Q2 2024, the Tetrahydrofuran (THF) market in the APAC region witnessed a stable trend with mild inclines, fundamentally driven by fluctuating demand-supply dynamics and cost factors. The quarter was characterized by increased production costs, particularly due to heightened crude oil prices, logistical challenges including elevated shipping costs, and container shortages. The spandex market, a significant downstream sector, exhibited its typical off-season traits with high inventory levels, impacting THF demand. However, the overall price environment was moderately positive as manufacturers navigated these complexities with caution.
Focusing on Japan, the THF market saw the most notable price changes. The second quarter of 2024 reflected a -3% decrease in prices compared to the previous quarter, indicative of marginal adjustments in response to market pressures. Despite this, a price comparison between the first and second half of the quarter showcased a 2% increase, signaling a slight recovery or stabilization in market sentiment.
Seasonal fluctuations typically observed in the textile and spandex industries influenced these trends. Japan's THF market's latest quarter-ending price stood at USD 1720/MT CFR Tokyo, reflecting the intricate balance of sustained recovery efforts and market pressures. The pricing environment, though exhibiting short-term declines, has been relatively stable, with a cautiously optimistic outlook. Thus, despite the inherent market challenges, the THF pricing context in Japan for Q2 2024 has maintained a poised and balanced stance.
Europe
In the second quarter of 2024, the Tetrahydrofuran market in Europe experienced significant price increases, driven by several pivotal factors. A notable uptick in demand from key downstream sectors, particularly the spandex industry, contributed to this trend. Despite moderate overall demand, increased production costs due to geopolitical tensions, and higher feedstock prices, particularly butanediol and naphtha, exacerbated the price hikes. Additionally, logistical challenges like higher shipping costs and container shortages further strained the supply chain, pushing prices upward. Domestic production lagged as manufacturers struggled to secure more inquiries, adding to the price pressure.
Focusing on Germany, the region observed the most pronounced price changes. The overall trend for Tetrahydrofuran prices in Germany was one of consistent increase, marked by a 28% rise from the previous quarter and a significant 26% jump compared to the same quarter last year. Seasonality played a role, with spandex factories showing typical off-season traits, yet this did not dampen the upward pricing momentum. The price comparison between the first and second half of the quarter showed a marginal 1% increase, indicating a stable rising sentiment throughout the period.
The quarter concluded with Tetrahydrofuran prices at USD 2627/MT FOB Hamburg. This consistent increase suggests a predominantly positive pricing environment, driven by the aforementioned factors. The combination of heightened demand from downstream sectors, increased production costs, and supply chain disruptions ensured that prices remained on an upward trajectory.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the Tetrahydrofuran market in North America continued to increase overcoming the challenges from the fourth quarter in 2023. Better demand and production capacity issues led to price increases, and the overall demand for petrochemicals, including Tetrahydrofuran, improved.
The market faced additional challenges, including increased inflation, interest rates, and geopolitical tensions, impacting the supply chain. The economic and energy market outlook remained uncertain, with varying regional economic prospects. In the first quarter of 2024, no plant shutdowns were reported, which was a positive development for the market.
Better demand from downstream sectors such as PTMEG and spandex resulted in higher production rates and prices. The market was also affected by complex crises affecting vital trade routes, such as incidents in the Red Sea, geopolitical tensions in the Black Sea, and the impact of climate change on the Panama Canal. The quarter-ending price of Tetrahydrofuran FOB Texas in the USA was USD 2115/MT.
APAC
In Q1 2024, tetrahydrofuran prices in the APAC region were influenced by several factors. Tight supply in the market drove prices up, attributed to limited inventories and constrained supply chains, particularly in the Red Sea region. Geopolitical issues and the anticipation of OPEC+ reducing crude supply in 2024 raised energy costs and increased tanker shipments. While demand for tetrahydrofuran remained moderate, downstream sectors like spandex and covering experienced demand delays. South Korea saw significant price declines due to ample supply and resolved geopolitical issues. Decreased temperatures also reduced demand for PTMEG, a key end-use for tetrahydrofuran, leading to fewer market inquiries. South Korea's tetrahydrofuran prices were influenced by China's commodity prices, as it is the primary exporter. No plant shutdowns were reported in Q1 2024 that affected tetrahydrofuran prices. South Korea's market exhibited a bearish trend with moderate supply and demand. The quarter ended with a tetrahydrofuran price of USD 1689/MT CFR Busan.
Europe
In the first quarter of 2024, Tetrahydrofuran prices in the European market underwent a significant incline. This hike was influenced by several factors. Firstly, there was an increase in demand for Tetrahydrofuran from downstream industries like PTMEG and spandex. This increased demand led to price upward momentum as manufacturers struggled to maintain stable prices in a competitive market. Germany experienced the most significant price fluctuations in the Tetrahydrofuran market. Prices in Germany declined throughout the quarter, reflecting weaker demand and heightened market competition. Inflationary pressures persisted, worsened by decreased demand for crude oil. Increased transportation costs resulting from incidents in the Red Sea have caused oil prices to rise, leading refiners to look for domestic sourcing alternatives. This situation resulted in higher rates for Suezmax crude tankers transporting oil from the Middle East to northwest Europe. The European Commission urged member states to maintain the existing reductions in gas consumption as the deadline for emergency legislation mandating these cuts approached. The German economy encountered various geopolitical and macroeconomic risks, including trade conflicts, tariffs, sanctions, and uncertainties surrounding Brexit, all of which contributed to the pressure. In conclusion, the pricing environment for Tetrahydrofuran in Q1 2024 in Europe, particularly in Germany, was negative, characterized by decreasing prices. The quarter-ending price for Tetrahydrofuran FOB Hamburg in Germany was recorded at USD 2183/MT.
