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A Rise in Downstream Demand Elevates the Prices of European Butyraldehyde Prices
A Rise in Downstream Demand Elevates the Prices of European Butyraldehyde Prices

A Rise in Downstream Demand Elevates the Prices of European Butyraldehyde Prices

  • 29-May-2023 3:32 PM
  • Journalist: Bob Duffler

Since the beginning of Q2 of 2023, prices of Butyraldehyde have witnessed an upward trend in the Western market on account of improved demand dynamics while the inventory remained sufficient in the region. Although, feedstock Propylene and upstream TTF Natural gas prices have continued to decline, which resulted in the low production cost of Butyraldehyde in the regional market. In addition, the macroeconomic uncertainties, such as mounting inflation and recession woes, as well as rising interest rates by the European central bank (ECB), have further impacted the prices of Butyraldehyde in the regional market.

Furthermore, market players reported that demand for Butyraldehyde from the downstream automotive industry has strengthened with ample new orders in the regional market, which has promoted the manufacturer to revise their price quotation. According to the European Automobile Manufacturer's Association (ACEA), new-car registrations grew by 17.8% to 3.5million registered cars in April 2023, maintaining the good momentum in automotive industry sales and, as a result, boosting the demand for Butyraldehyde in the regional market. As per ifo Business, Climate Index increased from 93.2 to 93.6 in April, compared with the prior month, indicating an improved market sentiment.

Meanwhile, the supply chain, which seemed to be disrupted in the initial stage, has now been relieved, and commodities have been actively moved. Market participants reported adequate inventory available to meet the current demand. Therefore, considering the aforementioned scenario, prices of Butyraldehyde were assessed at USD 2636/MT with a month-on-month increment of USD 54/MT during April 2023.

According to ChemAnalyst's expectation, "Butyraldehyde will persist in following the uptrend in the European market in the upcoming months on account of rise in demand for Butyraldehyde from the downstream automotive as well as from construction industry amid seasonal demand. Meanwhile, energy prices are expected to stable in the regional market, which may result in the soft production cost of Butyraldehyde in the regional market".

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