South Korean n-Propanol Prices Plunge Amid Demand Destruction and Slow Market Offtakes

Busan, South Korea- Since the beginning of December 2023, a decline of 0.6% was witnessed in the n-Propanol discussions in South Korea due to moderation in demand-supply dynamics and procurement activities from the end user industries amid declining temperatures in the Northern Hemisphere. During the month, market sentiments of n-propanol were underwhelming amid a decrease offtake from the downstream industries due to the declined consumption of cleaning agents and insecticides. Simultaneously, the cautious buying activities from personal care product manufacturers and pharmaceutical industries declined the inquiries for n-Propanol from buyers.

At the beginning of the month, the n-Propanol demand was consistent in the domestic market amid moderation in consumption rates from the end-user daily care products and ink manufacturers during winter. As per the sources, South Korea's manufacturing Purchasing Manager's Index shifted and increased marginally to 50 points during November 2023 compared with the previous month, indicating expansion in the manufacturing sector activities. The production rates of n-Propanol were stable, and supply rates were consistent in the market. Meanwhile, offtakes remained moderate from the buyers amid cautious buying activities from the regional buyers and procurement activities before the peak winter.

Furthermore, the upstream cost support on n-Propanol was stable at the beginning of the month amid improved availability of upstream Ethylene and a reduction in Crude Oil prices after the resumed refinery operations and increased refining capacity in the North American region. However, a decrease in the feedstock Ethylene costs was witnessed in the mid-month due to increased inventory levels and sluggish offtakes from downstream Polyethylene industries because of depressed orders from end-user Polymer industries, which negatively impacted the production costs of n-propanol.

As per the ChemAnalyst data sources, at the end of the week, which concluded on 22nd December 2023, n-Propanol FOB Busan prices hovered at USD 860/MT.

As per the ChemAnalyst assessment, the n-Propanol prices in South Korea will decrease further till the end of the year due to the destocking practices by the regional manufacturers towards the end of the year. Simultaneously, n-Propanol offtakes are sluggish from the key end-user amid the increased use of eco-friendly and bio-based products from cleaning agents, ink solvents for food packaging, and personal care products manufacturers. However, the price movement may shift in the first quarter of 2023 amid the reduced production and supply rates in peak winter. Furthermore, according to the Korea Chamber of Commerce and Industry (KCCI), South Korea’s economy is forecasted to remain weak during the first few months of 2024. So, the demand and consumption rates of n-Propanol are anticipated to remain low from the buyers.