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.
For the Quarter Ending December 2023
North America
The Tetrahydrofuran market in North America faced challenges during the fourth quarter of 2023, marked by a price decline due to subdued demand and production capacity issues. In the US, business activity remained steady, but the private sector witnessed a decline in employment, signalling an economic slowdown. Strategic Petroleum Reserve crude oil inventories remained stable, while US inventories dropped. Tetrahydrofuran demand was moderate, especially from downstream sectors like PTMEG and spandex, and no plant shutdowns were reported.
In November, business activity in the United States stayed stable, but the private sector experienced a decline in employment for the first time in nearly three and a half years. This aligned with anticipated signs of an economic slowdown in the fourth quarter. The forthcoming inflation report from the Labor Department was expected to reveal that businesses had maintained stable overall prices.
In the USA, Tetrahydrofuran prices dropped throughout the quarter and, reached USD 2085/MT, FOB Texas. This price decrease was attributed to weak demand from the PTMEG and spandex sectors, coupled with reduced production rates. Container ships increasingly chose West Coast ports to avoid delays and fees at the Panama Canal. The carriers that traditionally used the canal favored the West Coast, and as a result, containerized cargo was transported by rail to reach the Midwest and the East.
APAC
The Tetrahydrofuran market in the APAC region encountered challenges during the fourth quarter of 2023, influenced by various factors affecting market dynamics and pricing trends. Initially, there was a moderate supply of Tetrahydrofuran, with production rates remaining stable but insufficient to meet demand. The bearish market sentiment contributed to a decline in prices, reflecting an overall weak market outlook. The quarter-end saw reduced production rates and a subdued demand outlook from PTMEG, spandex, and other solvents. The South Korean market exhibited a bearish trend, characterized by a moderate supply of the product and lower production rates. Buyers had reservations owing to unfavorable buying indications, foreseeing an upsurge in supply in Asia due to congestion in the Panama Canal and heightened run rates in toluene disproportionation (TDP) units. Both local and global buyers, including those from Taiwan, faced challenges in accepting existing offer levels, as downstream customers were reducing their order quantities. Soft buying interest was observed, linked to growing inventories. Nevertheless, tepid downstream demand persisted, leading to an overall low level of buying interest. The latest price for Tetrahydrofuran CFR Busan in South Korea for the current quarter was USD 1879/MT.
Europe
Tetrahydrofuran prices in the European region remained steady throughout Q4 2023. There was a moderate demand for the commodity from end-use manufacturing units, particularly in the PTMEG and spandex markets. The construction and furnishing sector in the European market experienced a proportionate decline in demand for products in areas like coatings, adhesives, paints, and polymer resins. The overall tetrahydrofuran price dynamics were influenced by the supply chain of upstream naphtha from exporting countries, leading to a disbalance in the demand-supply chain, despite sufficient inventories and higher import volumes compared to exports. The Iran-aligned Yemeni Houthi militant group attacked ships in the Red Sea, targeting a Norwegian-owned vessel. This led oil giant BP to announce a temporary halt to all transit in the area. Furthermore, several shipping companies declared their intention to avoid the route. The demand from the PTMEG and spandex market remained subdued, putting pressure on manufacturers to maintain stable prices. The ongoing Israel and Palestine conflict continued to impact upstream crude oil and naphtha prices, and the limited product availability with end-use manufacturing units affected the overall market dynamics of tetrahydrofuran. The latest price for tetrahydrofuran FOB Hamburg in Germany for Q4 2023 was USD 2159/MT.
For the Quarter Ending September 2023
North America
Tetrahydrofuran prices in the third quarter of 2023 showcased minor fluctuations as the demand remained limited in the regional market. A major facet impacting the overall price ranges of the product is inclusive of the inclined upstream (benzene) amidst the inclined prices of the crude oil and naphtha prices in Q3. The demand outlook for the product from PTMEG and the spandex market remained on the modest side. Crude oil prices experienced a steady rise in the initial months of the third quarter, resulting in elevated expenses for Heavy Aromatic naphtha and its byproducts. The International Longshore and Warehouse Union (ILWU) members have officially endorsed a second tentative agreement with West Coast port owners, finally putting an end to the prolonged period of instability and trade bottlenecks triggered by the dock workers' strike. The International Energy Agency (IEA) has reported a decline in global documented oil inventories, primarily due to reductions in stocks held by the Organization for Economic Co-operation and Development (OECD).
Asia-Pacific
The prices of Tetrahydrofuran in the Chinese market were on a stable trend due to increased production costs, primarily driven by the rising prices of butanediol with a mild demand outlook, balancing the overall demand-supply chain. Simultaneously, global crude oil prices have consistently increased during Q3, adding cost pressures on naphtha and its related derivatives. This has also resulted in the initial decline in manufacturing activity. Earlier, the Chinese market experienced a slowdown during the off-season with reduced demand. However, in the festive season toward the end of the quarter, buyers have placed larger orders, boosting operational activities. The market for Tetrahydrofuran in China has remained stable, with product production rates staying moderate. In addition to the ongoing favorable tax policies, China has extended the preferential tax measures that were initially put in place during the pandemic. Originally set to expire by the end of 2023, these policies have now been prolonged until 2027. Furthermore, a significant portion of these policies apply to manufacturing businesses of various sizes. Under the current circumstances, prices have remained steady, and improved market dynamics are anticipated. The production and supply cut of crude oil from the Gulf countries to the Asian market subsequently elevated the demand for crude oil in the regional market.
Europe
Tetrahydrofuran market dynamics followed the stagnant behavior throughout the third quarter of 2023. This stability was attributed to consistent raw material costs (butanediol) and a slight uptick in industrial activity rates. While there are significant factors influencing Tetrahydrofuran market prices, there are also lesser factors, such as an economic slowdown and increasing inflation, emerging as potential challenges for manufacturers and suppliers, affecting their capacity to accept and fulfill orders. The German economy is grappling with difficulties restricted by a combination of factors, including heightened inflation, stricter lending requirements, and their combined impact on reducing consumer spending and investment interest. However, the economic uncertainty and subdued demand have had an impact on the overall prices of Tetrahydrofuran in the German market. Additionally, the demand outlook for the product from end-use manufacturing units, PTMEG, and spandex-based products impacted the overall market dynamics of Tetrahydrofuran in the European market.
For the Quarter Ending June 2023
North America
Tetrahydrofuran price dynamics moved southwards in the alternate Quarter of 2023 on the chronology of weak demand outlook from PTMEG and the coating sector. The profitable circumstances in the US request had stumbled outturn the Q2 as a result of the violent affectation pressures and fears of a fiscal extremity brought on by the failures of Silicon Valley and Hand Bank towards the launch of the Quarter. The after-impacts of these fiscal circumstances continued to affect the demand-force gap as the buyers showcased wait-and-watch instigation. Still, the buyers confined themselves from placing advanced orders convincing the manufacturers and suppliers to keep the prices on the weaker side of the price outlook. The US confederation kept the interest rate stable in the request to promote the artificial affair rate amidst the retarding price dynamics of tetrahydrofuran in the US request. The Dollar rate settled amid the undermining financial weakness in the North American request. Input requests fell emphatically, bringing about an excellent expansion in manufacturers' expositions.
Asia-Pacific
Tetrahydrofuran price dynamics fell in the second Quarter of 2023 on account of weaker demand strength and the oscillating economic fluctuations in the country. Fragile customer spending was the fundamental component behind the retarding price dynamics of tetrahydrofuran throughout the Quarter. Although the pace of central bank tightening had slowed in Q2, favoring the manufacturers on economic terms is the primary reason for the revised GDP numbers. The Chinese economy extended by 6.3% year-on-year in Q2 2023, showing quicker development contrasted with the 4.5% kept in Q1, yet missing the mark regarding market assessments of 7.3%. The most recent figures were contorted by a low base of correlation from last year when Shanghai and other significant urban communities were under severe lockdowns. During H1, the economy became by 5.5%. China had set a Gross domestic product development focus of around 5% during the current year, following a 3% extension in 2022. Tetrahydrofuran costs kept on declining in the Chinese market on the record of declining feedstock (butanediol) costs. Domestic creation is in the groove again with better buying exercises and productive work power.
Europe
Tetrahydrofuran prices in the European market showcased mixed market dynamics throughout the second Quarter of 2023 as the operational rate remained slow amidst the soft demand governed the overall market dynamics. The European market witnessed a recession leading to product shortage and impacting the overall selling prices of tetrahydrofuran in Germany. Furthermore, the prices were also impacted by the upset inventory network because of association strikes by the rail route association and moderate interest standpoint. Makers got fewer requests about the item from end-use (PTMEG) ventures because of the adequate reserve, thus administering the general market elements of tetrahydrofuran in the German market. Germany's expansion rate remained at 7.2% in mid Quarter, over the euro region's normal but underneath the UK's 8.7%. Greater costs have burdened family spending on things like food, attire, and furniture. Modern orders are additionally more vulnerable, mirroring the effect of higher energy costs on organizations. Towards the Quarter's end, the increased commodity prices, along with the urge to complete the backlogs, governed the slight incline in the prices of tetrahydrofuran in the European market.
For the Quarter Ending March 2023
North America
North American market showcased a declining trend of tetrahydrofuran in Q1 of 2023 on account of the weak demand outlook for the product. The US market saw a variety of external variables, including varying employment rates and poor weather conditions in the state of California in the first half of the quarter. Market supply disruption occurred, resulting in higher production costs. The Chinese market had suspended production, which had an impact on trading operations in the US market. Containers, on the other hand, were plentiful in US ports. Market players had indicated substantial material availability in the local market because of robust production rates from key manufacturers as well as a continuous flow of imports. Furthermore, the US Ports of Long Beach and Los Angeles have had the manpower and dockworker shortages, resulting in port closures. Towards the quarter end, tetrahydrofuran prices were observed at USD 2775 per MT, FOB Texas.
Asia Pacific
In the Asia-Pacific region, the overall market dynamics of tetrahydrofuran were mixed throughout the first quarter of 2023. Tetrahydrofuran prices inclined in the first half of Q1 as feedstock (butanediol) prices in the domestic market remain stable due to fluctuations in upstream (crude oil) pricing. After the New Year vacation, the Chinese market recovered in January, and new industrial activity began. Meanwhile, the prices of the feedstock (butanediol) slightly shifted as the demand outlook was low, and the Lunar Festival holidays impacted the operational activity, influencing the final prices in the Chinese market. Industrial activity has not yet returned; the country was battling a staff shortage. Towards the quarter's end, tetrahydrofuran prices were observed at USD 2151 per MT, Ex-Qingdao.
Europe
In the European region, tetrahydrofuran prices declined in the first quarter of 2023. Domestic production of tetrahydrofuran in the German market was limited due to low demand from downstream sectors. International shipping freight charges have also decreased. The dynamics of the feedstock (butanediol) market changed southward, influencing ultimate prices. The housing industry in Germany remained on the lower edge considerably, decreasing demand for tetrahydrofuran in coating and PTMEG manufacturers. The feedstock (butanediol) market dynamics changed southward, influencing final pricing. The domestic supply chain remained constrained when the trade union went on strike, affecting tetrahydrofuran logistics in Germany. Towards the quarter end, tetrahydrofuran prices were observed at USD 2480 per MT, FOB Hamburg.
For the Quarter Ending December 2022
North America
Tetrahydrofuran prices in the North American region showcased sliding momentum during the fourth quarter of 2022 on the back of declining feedstock (butanediol) prices in the regional market. Throughout the quarter, the demand-supply chain remained unstable as suppliers did not conquer many inquiries about the product, as sufficient inventories were present to cater to the domestic demand. In the mid-quarter, a slight decline in energy prices along with declining freight charges plunged the final prices of tetrahydrofuran in the US market. Furthermore, the threat of continuing the rail strike by the union member had put the buyers in a dilemma to showcase further interest in buying the product. Towards the quarter's end, festive holidays and storm Elliot declined the operational rate of tetrahydrofuran due to a weak demand outlook and low purchasing activities.
Asia Pacific
In the Asia-Pacific region, the overall market dynamics of tetrahydrofuran moved southwards throughout the quarter on account of the weak Chinese market as the country imposed continued with its zero-Covid policy. The downstream operational rate fell in October month, on the back of weeklong national holidays in the country. The supplier's attitude of maintaining prices was dominating, the BDO on the raw material side was shocked and fell, the cost support was weakened, and downstream maintained the follow-up of just-needed orders. In mid-quarter, the country imposed strict lockdown curbs in Wuhan and Shanghai, restricting the supply chain. Tetrahydrofuran pricing in China was mainly determined by dropping yuan exchange rates and poor PTMEG and coating sector demand.
Europe
In the European region, tetrahydrofuran prices declined in the fourth quarter of 2022. German suppliers received fewer new deals, and the operational rate declined. Butanediol (feedstock) showcased a declining trend throughout the quarter, proportionally impacting the production cost of tetrahydrofuran. In the mid-quarter, the supply chain improved slightly, yet the demand outlook remained gloomy, impacting the final prices of THF. Towards the quarter's end, the tetrahydrofuran prices continued to fall as the country minimized the production rate on account of the Christmas and New Year holidays. The demand from downstream, PTMEG, and coating industries were slow as the performance of the housing sector in the country remained sluggish.
For the Quarter Ending September 2022
North America
Tetrahydrofuran prices in the North American region displayed mixed sentiments during the third quarter of 2022, as the inflation rate eased to 8.5% during the quarter starting. Crude oil prices showcased a continuous fall throughout the quarter, proportionally impacting the benzene prices, which is the upstream element. Towards the mid-quarter, Tetrahydrofuran prices declined slightly, owing primarily to the sufficient availability of inventories with the major end-use industry, spandex businesses. With the decline in the employment rate, the country is facing a labor shortage amid growing fears of a US recession. In September, the price of Tetrahydrofuran reached USD 4310 per MT, FOB Texas (USA).
Asia Pacific
Tetrahydrofuran prices in the Asia-Pacific region remained low due to fewer inquiries from the downstream sector during the third quarter. Feedstock (butanediol) prices declined in the regional market. The operational rate in China declined because of the mid-autumn festival in the mid-quarter. Towards the end of the quarter, the demand for THF as a solvent decreased as downstream sectors showcased low operational rates in the third quarter of 2022. Tetrahydrofuran demand remained weak due to weak consumer spending caused by the sluggish consumer sentiment and the slow pace of the economy's recovery. Market participants reported limited product inquiries in the Chinese market. Towards the end of Q3, Tetrahydrofuran prices were observed at USD 2560 per MT, CFR Qingdao, China.
Europe
In the European region, Tetrahydrofuran prices declined in the third quarter of 2022. According to the Federal Statistical Office of Germany, the inflation rate in the country reached 7.9% in August, leading to stagflation in the country. Governed by the declining feedstock butanediol prices, the market dynamics of THF followed the decreasing trajectory. The union members of Port of Felixstowe went on strike, hampering vessel movement on the pots. The transit time was increased, and the transportation of the product was delayed. The demand from downstream, PVC and spandex production also remained on the lower end, significantly impacting the prices of THF in the German market. Tetrahydrofuran-FOB Hamburg prices were valued at USD 2085 per MT towards the quarter end.
For the Quarter Ending June 2022
North America
Tetrahydrofuran prices continued to rise during the second quarter of 2022 in the USA, which was impacted by rising crude oil prices and consistent domestic and international market offtakes. THF prices significantly increased throughout June, mostly due to rising upstream value. While the USA has been pressing major economies to increase the availability of crude oil by releasing strategic reserves, rising crude oil prices have placed inflationary pressure on numerous commodities worldwide. Despite these measures, several commodities, like THF in the USA, continued to trend upward. In conclusion, it was predicted that THF prices would remain high during the second quarter of 2022.
APAC
Tetrahydrofuran prices in the Asian market fell due to fewer inquiries and sluggish demand during Q2 2022. The production of Tetrahydrofuran was made feasible due to the surplus availability of BDO as a feedstock (THF). As downstream sectors started to increase operating rates in expectation of a substantial recovery in demand in the third quarter of 2022, the need for THF as a solvent has gradually decreased. Demand for Tetrahydrofuran remained weak due to weak consumer spending brought on by the recession and the slow pace of the economy's recovery, and most buyers chose to destock their inventories in light of the unstable international market environment.
Europe
THF prices in the European region increased during Q2 2022. The region's pharmaceutical players were adversely affected by a sharp increase in raw material prices, and they were compelled to pass on cost increases to consumers. Because there is a shortage of BDO feedstock and fewer imports from Asian nations are arriving in the region, the production of Tetrahydrofuran (THF) is constrained. During the second quarter of 2022, Tetrahydrofuran-FOB Hamburg was valued at greater levels in Germany. As downstream companies have started to improve operating rates in expectation of a strong recovery in demand in the third quarter, the demand for THF as a solvent has steadily climbed.
For the Quarter Ending March 2022
North America
During the first quarter of 2022, Tetrahydrofuran prices grew by 3% from February to USD 4180 per MT in March. The increase in costs in February is due to a lack of product availability in the country and rising demand from the pharmaceutical industry. THF's rising pricing trend in the United States has been aided by a disrupted supply chain and high freight costs. In the first weeks of the month, the slowdown in trade activity from China due to the Omicron outbreak and the Spring Festival holidays added to the strain. Later in the month, geopolitical worries wreaked havoc on the market. The country's prices have been compounded as a result of the protracted port congestion in the United States.
Asia Pacific
During the first quarter of 2022, tetrahydrofuran prices in India skyrocketed. Following COVID-19 and the resulting disruption to China's supply lines, the Indian pharmaceutical market has become reliant on China for imports. Meanwhile, economic activity was slowed or halted throughout the Holiday season and the Winter Olympics in Beijing, affecting supplies in the Indian market and forcing dealers to pass on the high costs to customers. In March, Tetrahydrofuran Ex-depot Chennai offers were reported at USD 8641/MT in the Indian market. Furthermore, due to energy-related concerns affecting many nations, output in China has been reduced, and the availability of numerous pharmaceutical feedstock and solvents have decreased in the APAC region.
Europe
The domestic Tetrahydrofuran market in the European region has decreased to an acceptable price level in Q1 2022, following a substantial rise. THF demand from pharmaceuticals, a significant downstream, has remained relatively flat as demand to other critical solvents has increased. As a result of geopolitical difficulties, the Russia-Ukraine war increased pressure on upstream values, resulting in a demand-supply mismatch in the region for several commodities. Upstream Maleic Anhydride and Butanediol prices have also dropped to a certain level, and the price disparity between raw materials and Tetrahydrofuran (THF) has been noted to be considerable due to the supply and demand imbalance. Tetrahydrofuran CFR offers were therefore quoted at USD 5160/MT at the end of quarter ending March 2022.
For the Quarter Ending December 2021
North America
During the fourth quarter, the North American market saw an increase in THF pricing, owing to high demand from downstream industries. In addition, the hurricane Ida hit the Gulf Coast of the United States, causing several industrial factories to shut down owing to power disruptions in the area, which had its aftermath in the Q4 also. As a result of the climatic disaster, disruptions in logistics resulted in supply constraints, leading to an increase in upstream Butanediol costs in the region during this quarter.
APAC
Tetrahydrofuran (THF) prices rose in the last quarter of 2021 as several pharma companies in India have complained about a shortage of THF solvents due to a production decrease in China during October. Upstream 1,4-butanediol have been on an upward trend during the Q4. Also, due to dual control policy in China as a result of energy-related concerns plaguing the production, India's availability of several pharmaceutical feedstock and solvents has decreased. As a result, THF prices increased, settling at roughly INR 571940/MT Ex-Depot Chennai in December.
Europe
Tetrahydrofuran (THF) prices in Europe surged significantly in Q4 2021, following worldwide market dynamics. During a severe supply shortage, European manufacturers of upstream BDO makers have received a flurry of inquiries from Asia. Due to continued demand and limited supplies, major manufacturers such as Ashland hiked their THF pricing for Europe in November. In terms of demand, demand from downstream Polybutylene Terephthalate (PBT) manufacturers was strong throughout the quarter.
For the Quarter Ending September 2021
North America
During the third quarter of 2021, the prices of Tetrahydrofuran observed an upward trajectory across the North American region. Tight availability and high prices of raw materials have further exacerbated the pricing trend of Tetrahydrofuran across the region. Strong demand from the downstream pharmaceutical sector continued to fetch strong margins to the producers during the quarter. Lyondell Chemical Company announced to increase its prices for 1,4 Butanediol, effective October 1, 2021, which is likely to propel the prices of THF during Q4.
Asia
The overall market outlook demonstrated an upward trend during the third quarter of 2021 in Asia. In India, soaring freight costs amid stable to firm offtakes from the domestic market led to a significant rise in the prices of THF. Traders reported a severe shortage of Tetrahydrofuran as imports were largely delayed during the quarter. In addition, disturbing production activities across major exporting countries also affected the global availability of the product. Therefore, a significant hike in THF prices was observed, as they shot up from USD 4996/MT to USD 5810/MT Ex-Depot Chennai from July to September.
Europe
In the European region, the prices of THF witnessed an increment during the 3rd quarter. Imports from the Asian countries have reduced drastically due to multiple factors such as surging logistics costs, limited vessel spaces, and price increases in Asia. The imports are likely to remain affected for the remaining year due to logistics constraints, global tight supply, and increasing demand for THF in the Asian markets. Decreasing imports of BDO in Europe and constrained domestic supplies will be putting upwards pressure on the THF prices in the upcoming quarter .
For the Quarter Ending June 2021
North America
Tetrahydrofuran (THF) prices rose effectively during this quarter in North America region, due to critical shortage of feedstock chemicals. Prolonged disruption in production activities across the US induced an extreme rise in its prices for Butanediol (BDO). This steep rise in BDO prices, directly affected the price of THF in the regional market. On the demand side, demand remained strong from the downstream sectors of USA, as the domestic consumption effectively improved week over week after successful vaccination drive in the country. In the meantime, major Tetrahydrofuran manufacturer BASF increased prices of BDO and its derivatives. Consequently, Tetrahydrofuran prices surged by USD 550/MT for North America in May, due to high demand and global scarcity.
Asia
Asian market witnessed stable to firm demand for Tetrahydrofuran (THF) during this quarter, amid curtailed supply activities. A steep rise in prices was observed in India during May, backed by delayed shipments and crippled supply activities due to ongoing pandemic in the country. Prices of THF hovered around USD 5381/MT in the month of May in India. However, global shortage of BDO also remained a major concern for the manufacturers in Asia. While in China, prices rose effectively during this period, due to stable offtakes from the domestic market and rise in feedstock BDO prices in the country.
Europe
Robust demand from the downstream sectors amid extreme shortage of feedstock chemicals, increased the prices of Tetrahydrofuran across Europe during Q2 2021. Feedstock BDO prices soared globally, due to critical shortage amid curtailed production activities. Major manufacturers raised prices BDO derivatives prices to sustain their margin. Similarly, European manufacturers also witnessed steep rise in prices of THF during this timeframe.
For the Quarter Ending March 2021
North America
The North American THF supply remained curtailed due to the shortage of feedstock BDO across the region during Q1 2021. LyondellBasell’s upstream Propylene Oxide (PO) manufacturing plant at Texas faced force majeure, that led to cut down in production of BDO across the region. In addition, BASF increased the prices of BDO and its derivative THF by USD 330 per MT and USD 440.5 per MT respectively in North America with effect from 1st April 2021. Some manufacturers were heard fearing that the production of THF may be subject to government intervention that may further tighten the US THF supply in the upcoming quarters.
Asia
In Asia, solid demand from the domestic downstream sectors and ample supply pushed the prices of THF during Q1 2021. Europe-Asia route congestion created shortage of the feedstock BDO (1,4-butanediol) as well as THF. In the Indian markets, the price of THF surged from USD 2436 per MT in January 2021 to USD 2597 per MT in March 2021. Meanwhile, the global market has been facing huge crisis of BDO shortage, which skyrocketed the prices of BDO and its derivative products including THF. In addition, container shortage from Europe to Asia and Chinese lunar holidays also left adverse effect on the supply fundamentals across the region.
Europe
The European region faced similar situations like other countries. The country reported shortage of feedstock BDO across the region due to multiple reasons, one of them being shortage of container availability. LyondellBasell’s feedstock PO manufacturing in Rotterdam faced force majeure due to technical instability, that affected the supply of THF across the region, thereby strengthening its prices.
For the Quarter Ending March 2021
Asia
In Asia, solid demand from several downstream sectors and tight supply pushed up the prices of THF during Q1 2021. Europe-Asia route congestion created shortage of feedstock BDO (1,4-butanediol) as well as THF. In the Indian market, price of THF surged from USD 2436.2 per MT in January to USD 2597.4 per MT in March, under global inflation in petrochemical prices. Meanwhile, the global market was facing huge crisis of BDO, that sky-rocketed the prices of BDO and its derivative products including THF. In addition, container shortage from Europe to Asia and Chinese Lunar holidays left adverse impact on the supply fundamentals across the region.
North America
The North American THF supply remained curtailed due to shortage of feedstock BDO across the region during Q1 2021. LyondellBasell’s upstream Propylene Oxide (PO) manufacturing plant at Texas faced force majeure in Feb., which sent ripples to the production volumes of BDO across the region. In addition, BASF also increased the prices of BDO and THF by USD 330 per MT and USD 440.5 per MT respectively in North America. The price increase will be implemented with effect from 1st April 2021 in the region respectively.
Europe
The European region faced challenges like other regions of the globe. The region was heard dealing with acute shortage of the feedstock BDO due to multiple reasons, one of them being shortage of shipping containers. LyondellBasell’s upstream PO manufacturing unit in Rotterdam faced force majeure due to technical instability, which affected the production of THF across the region, thereby strengthening its prices. BASF was heard positively increasing the prices of BDO and THF in Europe in both the months of January and March.
