OQ Chemical announce prices hikes for n-Butanol and Iso-Butanol prices in the North and South American markets

Texas (USA): In recent weeks, the United States has witnessed significant shifts in the market dynamics of n-butanol and iso-butanol, driven by a combination of factors including feedstock price increases, demand surges, and evolving downstream markets. The market responded to this situation following a recent announcement by a key player, OQ Chemicals, which declared a significant price increment in n-butanol and iso-butanol prices due to supply-demand dynamics. The company announced a price increase of USD 220/MT for North and South American markets, effective from March 1, 2024.

One of the primary factors affecting the n-butanol and iso-butanol market is the shortage of feedstock, namely Propylene, due to the shutdown of production plants. In January 2024, key market players including BASF SE, Dow Chemicals, ExxonMobil Chemicals, and Equistar Chemicals were forced to reduce operational capacity to 50% due to extreme adverse weather conditions. This shutdown led to a dip of more than 90 million barrels in US Propane and Propylene inventories for the first time in three months, according to data from the US Energy Information Administration.

Fluctuations in crude oil prices have also impacted the overall scenario. Both n-butanol and iso-butanol are derived from various feedstocks such as propylene, butane, and crude oil derivatives. Any fluctuations in the prices of these feedstocks directly impact the production cost of n-butanol and iso-butanol. Geopolitical tensions, supply chain disruptions, and shifts in global energy markets have led to volatility in feedstock prices, thereby affecting the overall cost structure of n-butanol and iso-butanol production in the Americas. The rise in feedstock prices has compelled manufacturers to adopt strategies aimed at mitigating cost pressures, including optimizing production processes, exploring alternative feedstock sources, and enhancing operational efficiency.

Simultaneously, the demand for n-butanol and iso-butanol in the USA has experienced a notable surge across various industries. Both chemicals serve as crucial intermediates in the production of numerous downstream products, including coatings, adhesives, solvents, plastics, and personal care products. The growing construction and automotive sectors, coupled with the increasing demand for paints, coatings, and adhesives, have been driving the consumption of n-butanol and iso-butanol in the USA.

Additionally, transportation challenges drive price surges for n-butanol and iso-butanol in the USA and other American countries. The Panama Canal, a vital artery for maritime trade, has been facing operational constraints, leading to delays and disruptions in the shipment of goods. This bottleneck has particularly affected domestic shipments of n-butanol and iso-butanol within the USA, causing supply chain disruptions and driving up prices. Simultaneously, the Red Sea, a critical route for global trade, has experienced its own set of challenges, further escalating the situation. Heightened geopolitical tensions and security concerns in the region have led to increased risks and uncertainties for vessels transporting chemicals like n-butanol and iso-butanol, impacting global trade routes and contributing to price hikes.

In conclusion, the n-butanol and iso-butanol market in the USA are influenced by a complex interplay of factors, including feedstock price fluctuations, demand dynamics, and evolving downstream markets. According to analysis, both products will maintain the same trend until there is an ease in logistics disruptions and feedstock prices stabilize.