Diminished Demand Drags Down the European Isopentane Prices at the Start of Q2 2023
Diminished Demand Drags Down the European Isopentane Prices at the Start of Q2 2023

Diminished Demand Drags Down the European Isopentane Prices at the Start of Q2 2023

  • 30-May-2023 5:44 PM
  • Journalist: Jacob Kutchner

The price of Isopentane saw a declining trend in April 2023 due to the weak demand from downstream industries such as chemical solvents and foam manufacturing sectors. Isopentane is used in various industries where it is utilized in applications such as Polyurethane foam production, refrigerants, propellants, solvents, and chemical synthesis. The primarily used industry is the construction, automotive, and insulation sectors.

In April 2023, the European construction industry remained sluggish due to tight financial conditions and rising interest rates. The demand for Isopentane in the construction sector dampened and helped the supply pressure to ease in Eurozone.

The economic performance of the Eurozone remained gloomy in April 2023, according to the recent Purchasing Manager's Index (PMI) data. The new orders decreased from both the domestic and overseas markets and showed a decline in the thirteenth successive month in a row.

The downstream chemical solvents and foam manufacturing sectors' demand for Isopentane was further stifled by increased financing rates for the region affecting the performance of the petrochemical industry.

Additionally, the Eurozone is struggling with high inflation and rising interest rates, which are reducing consumer spending and company investment. An abrupt drop in new orders is causing the manufacturing sector to struggle. In order to reduce demand and drive prices down, the European Central Bank (ECB) has been raising interest rates. The European central bank may decide to halt its cycle of rate increases if the economy significantly deteriorates.

According to ChemAnalyst, the cost of Isopentane hovered around USD 1893/MT on a FOB Antwerp basis in April 2023.

It is expected that the price of Isopentane is likely to decline in the European market if the construction industry remains in a sluggish pattern. The outlook for the construction industry is likely to decline due to low investment and rising interest rates in the Eurozone. It is anticipated that the Isopentane value is likely to decline from 3% to 4% in May 2023.

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