n-Butanol Prices Showcase Bearish Trend in the US Market Amidst Low Purchasing Activity
- 30-Oct-2023 1:37 PM
- Journalist: Jacob Kutchner
Weak demand levels for n-Butanol maintained the US market to remain at a marginal lower end during October 2023. During this timeframe, the decline in orders and enough stock availability kept the downtrend of n-Butanol prices in the US market.
Despite a marginal improvement in the US economic activities, the prices of n-Butanol in the USA continued its downtrend in October 2023 on the back of enough inventories catering to the subdued demand. Month-by-month, the demand for n-Butanol from the downstream paints and coating industry has deteriorated. As per the market analysis, few enterprises quoted that there is enough material on the market, which indicated that there is no shortage of materials for n-Butanol at the current time. For now, the goal is to lower inventories, which means that businesses are trying to reduce the supplies of n-Butanol they have on hand to save on storage costs and reduce the risk of obsolescence. Moreover, the prices of feedstock Propylene have also declined within this timeframe, which supported the price trend of n-Butanol due to lower production costs.
Now, talking about the overall downstream PVC industry, North American PVC production decreased by 4.2% from August to September 2023 and 3.8% from September 2022. As per the data released by the American Chemistry Council (ACC), the decline in North American PVC was attributed to weaker demand from downstream industries as the demand for PVC from downstream industries, such as construction and packaging, has been weakening in recent months including rising interest rates and inflation. Hence, to balance out the current dynamics, the planned shutdowns and maintenance at major PVC plants reduced the overall production of PVC in the region. However, the ACC is optimistic that the production decline was temporary and that production levels would rebound in the coming months. Likewise, the low demand from the downstream industry caused the manufacturers to cut back on production levels as a few enterprise units, including Dow Chemical and BASF Total Energies Petrochemicals, in Freeport and Port Arthur, Texas, put their feedstock propylene to shut down during the early September 2023 till the next announcement. Furthermore, according to the data quoted by FRED, the enhancement in the construction sector remained unaffected in the prices of n-Butanol in the US market amid sufficient supplies to cater to the subdued demand.
As per ChemAnalyst, November might be a month for restocking, which suggests that businesses will start ordering more materials in November to meet the expected demand for the holiday season. This might slightly rebound the pricing dynamics of n-Butanol in the USA during this timeframe.