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Impact of Russia-Ukraine Crisis on Global C4 Derivatives Market

Impact of Russia-Ukraine Crisis on Global C4 Derivatives Market

Impact of Russia-Ukraine Crisis on Global C4 Derivatives Market

  • 25-Apr-2022 4:43 PM
  • Journalist: Bob Duffler

Since the beginning of April, C4 derivative prices have continued to rise in the global market. The rising cost of raw materials has been impacted by the rising price of upstream crude oil as a result of the Russia-Ukraine conflict, which has put pressure on the C4 derivatives market. Demand from downstream sectors such as paint and coatings and tires, on the other hand, has remained sturdy. As a result, the global market price of C4 derivatives such as Butadiene, Isobutyl Alcohol, and other products has continued to rise.

As the majority of the world relies on Russia for the import of oil and gas, the conflict between Russia and Ukraine has severely impacted the supply chains. Increased crude oil value in the global market, which squeezed the Raffinate and Naphtha cost and other feedstock prices such as Ethylene, Acetic acid, Methanol, have weighed on the high pricing of C4 derivative.

The cost of C4 derivatives has been pushed up by rising demand from the downstream paint and coating as a solvent and elastomer industry in the Asia-Pacific area. Due to the ongoing rise in raw material prices, manufacturers have increased their production costs. On the supply side, the conflict had produced a serious supply chain challenge, exacerbated by China's strict measures to prevent the spread of Covid -19, causing logistical difficulties and a demand-supply gap in the Asia region. Similarly, the European market demonstrated an upward trend in C4 derivatives due to rising crude oil prices. In addition, the sanctions imposed by the United States against Russian imports has shoot-up the energy cost and caused inflation in the prices of raw materials in the European region.

As per ChemAnalyst, "Prices of C4 derivatives are expected to climb globally in the coming weeks due to increased demand from downstream industries such as paint, coatings, and tires. Meanwhile, crude oil prices are predicted to rise, affecting the pricing of Raffinate, Naphtha, and other feedstocks.".

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