The Asian tetrahydrofuran (THF) market remains resilient and shows relative stability despite increasing shipping costs, soft global demand, and increased macroeconomic pressures. Domestic producers, especially those in China, are tactically manoeuvring through an ever-multiplying geography influenced by changing trade policies, unstable feedstock patterns, and growing sustainability demands.

Over the past few weeks, Chinese container shipping to the United States has skyrocketed, marking a temporary upswing in trans-Pacific cargo activity. That followed a 90-day trade tariff pause by Washington and Beijing that allowed importers to rush goods ahead of time. These shifts in freight expenses have indirectly been affecting the THF market by boosting total supply chain costs.

Under the pressure of surging freight prices, THF producers in Asia have generally maintained operational stability. China, the largest producer in Asia of THF, has taken advantage of stable raw material supply and strong export momentum. In April, the nation saw an 8.1% year-on-year growth in exports, mainly due to foreign stockpiling—particularly in Southeast Asia—supporting demand for THF and its main precursor, butanediol (BDO). This increase in THF demand served to stabilize prices against the general uncertainty in the global market.

Feedstock BDO prices made small gains while its raw material prices declined. Propylene, which is the main raw material for BDO, fell significantly. However, THF producers held pricing steady, suggesting emphasis on protecting margins in anticipation of smooth downstream demand for THF and similar chemical intermediates. Meanwhile, butadiene—a key feedstock in adjacent chemical chains—held steady, offering further cost predictability for THF producers. Globally, however, signs of weakening industrial demand are emerging. This points to a potential slowdown in production, which may eventually weigh on THF demand.

Chinese THF producers, in turn, are redirecting more emphasis to intra-Asian and European Union trade routes to compensate for softer U.S. demand. Their ongoing pricing restraint, even though input costs are falling, is part of a larger strategy to support market balance and profitability in the THF market.

Simultaneously, America's trade policy is changing the way that businesses globally source. The newly imposed tariffs by the Trump administration on textiles and apparel have more severely affected a number of Asian nations compared to India, where the rate is lower at 27%. India thus enjoys a relative advantage, while reshoring operations back to America may increase the cost of clothing by up to 20%, further tightening global supply chains and affecting demand for petrochemical products such as THF.

In the future, Asia's THF industry is likely to continue being responsive, underpinned by regional collaboration, proactive trading approaches, and ongoing emphasis on sustainability in an evolving global chemical environment.