Chinese Tertiary Butyl Alcohol Market is Experiencing Downward Trend Due to Low Demand
- 27-May-2022 3:41 PM
- Journalist: Li Hua
Qingdao, China: Inflation is escalating and can be seen globally coupled with the disruption in supply chain systems. Fuel costs are emerging due to inflationary pressure on crude oil, and the prices of almost all commodities are rising globally.
As per the latest insight, the price of Tertiary Butyl Alcohol (t-butanol) has shrunk in the Chinese market. The primary cause of the price drop is sluggish market sentiment. As a result, demand for t-butanol has deteriorated, and manufacturers are offering the product at a discount, as showed by lower spot market pricing. Although the price decline has offended manufacturers' profit margins, they still have a considerable profit margin of more than 50%. Therefore, the prices of t-butanol declined by 1-2% in the preceding weeks.
On the other hand, the lessened market caused t-butanol prices to fall. Furthermore, new export orders have continued to fall due to the war and Chinese epidemic restrictions. Despite the oversupply of cargoes on the domestic market, tertiary butyl alcohol prices continued to fall. Moreover, price declines were linked to crude oil price fluctuations, cheap raw material costs, and abundant inventory levels in the local market.
Beside from raw material costs, dwindling end-user demand, particularly from the paints and coatings and perfume industries, has contributed to the low pricing of t-butanol in the local market.
As per ChemAnalyst, the shipping volumes are falling. Some domestic facilities have just reopened. As a result, positive support from the supply side plummeted the terminal's ability to transport shipments at more significant prices. The downstream entered the market to observe and wait, making cautious acquisitions and weakening the negotiation environment.
According to ChemAnalyst, "prices of Tertiary Butyl Alcohol is likely to drop in the coming weeks due to the minimal raw material cost. Meanwhile, demand for t-butanol in the end-user sector, notably the paint and coating sector, is expected to be bearish. Furthermore, ramp-up in the production activities are expected, which further impact the cost of t-butanol in the Chinese market."