Oxo Alcohols Prices Follow Downtrend in the US and Europe Opposing China During May 2023
- 27-Jun-2023 4:51 PM
- Journalist: Nina Jiang
As per the recent analysis, the US and European markets have acknowledged the bearish market trend of Oxo-Alcohol amidst an unsteady economic era. On the contrary, the Chinese market experienced a boost in demand over Dragon Boat Festival amplified the prices of n-Butanol, Iso Butanol, and 2-Ethylhexanol.
The revised US Manufacturing PMI fell to 48.4 in May 2023, compared to 49.3 in April, pointing towards the sluggish economic activity in the US. An average drop of 2% has been observed in the prices of n-Butanol, Iso Butanol, followed by 2-Ethylhexanol, during May 2023. Due to the weaker economic condition and high inflation rate, the US Oxo-Alcohol demand has been muted. This muted demand has been influencing the prices of Oxo-Alcohol. The declining demand for 2-Ethylhexanol in the USA from the downstream market limits the trading fundamentals, which has also been observed for the overall prices of co-products n-Butanol and Iso Butanol, representing the decline.
Stating the fact that the PMI for the European market, covering the manufacturing sector, lowered to 45.8 as compared to the previous month at 47.3 represents the decline in the growth rate of economic development, followed by the contracted demand situation. Germany has also been hit by high inflation and rising interest rates, affecting the prices of n-Butanol, Iso Butanol, and 2-Ethylhexanol prices. As per the latest trend, a fall of around 2% has been observed in the prices of n-Butanol, Iso Butanol, followed by 2-Ethylhexanol, during the end of May 2023.
The demand for Iso Butanol, n-Butanol, and 2-Ethylhexanol in the Asia-Pacific region remains elevated and healthy, resulting in a bullish pricing trend. Market orientation in China, the largest domestic supplier and consumer of Oxo Alcohols, has been affected by the Dragon Boat Festival, a major festival celebrated in the country. Even before the holiday, manufacturers were stocking up the product in order to cater to the demand, which eventually led to an increase in prices. Following the holiday, the supply of n-Butanol, Iso Butanol, and 2-Ethylhexanol in the market was restricted, resulting in a tight cargo flow, leading the prices to rebound. Moreover, the rising crude oil prices in the first week of June 2023, a fundamental upstream to produce Oxo-Alcohol, also impacted the prices of the downstream derivatives. Even though the economic activity of China is bearish, the availability of low-set labor costs as well as the raw material, along with the minor restriction compared to the US and Europe, propelled the Chinese market to grow.
As per ChemAnalyst, the prices for n-Butanol, Iso Butanol, and 2-Ethylhexanol are likely to follow the same trend as the previous month due to flat demand in the US and European countries. However, the Chinese market would prompt to grow if the pandemic-related uncertainties do not get intensified further.