Surge in C9 and C10 Solvent Prices: Crude Oil and Construction Industries Drive Sharp Increases
Surge in C9 and C10 Solvent Prices: Crude Oil and Construction Industries Drive Sharp Increases

Surge in C9 and C10 Solvent Prices: Crude Oil and Construction Industries Drive Sharp Increases

  • 16-Aug-2023 6:18 PM
  • Journalist: Patricia Jose Perez

Prices of C9 and C10 solvents across Singapore, South Korea, Indonesia, India, and the United Arab Emirates rose by almost 20%. The prime reasons are attributed to the increments of approximately 15% in feedstock crude oil prices as supply became scarce, owing to production cuts by OPEC+ members, especially Saudi Arabia and Russia, and appreciable demand from the downstream construction and coating industry.

The construction industry was recorded to be performing well in the United Arab Emirates and Singapore, with sales in residential sectors showing an increment of approximately 60% in July 2023 as compared to July 2022. Even though commercial segments reported a decline of only 9% in the real estate market, good demand from the housing sector is likely to maintain the market's bullish trend till September. Prices of C9 solvents recorded a healthy increase of approximately 15% in July 2023, and in Singapore,  prices of C9 and C10 recorded an increase of 15% and 18%, respectively.

In India, the construction industry's performance was remarkably good, with sales of housing units reporting a surge of over 20% based on year-on-year in the first half of 2023. Automotive sales were also up by 15% in the second quarter of 2023, thereby increasing demand for engine gaskets and sealants in the automotive manufacturing segments. Furthermore, scarcity in the supply of feedstock crude oil from Russia will likely strengthen the current bullish market for C9 and C10 solvents. Prices of C9 and C10 recorded sharp increments of 7% and 20%, respectively.

In Indonesia, the healthy demand from the downstream paper coating and printing industry and rising feedstock crude oil prices contributed to the appreciation of C9 and C10 solvents. Indonesia remains one of the largest exporters of paper as consumption is likely to remain constant. However, demand from the downstream adhesive industry is likely to increase as the construction industry in Asia recovers. Prices of C9 solvent reported a healthy increment of 17% in July 2023.

The South Korean market witnessed a sharp increment of 20% and 16% in prices of C9 and C10 solvents, respectively particularly due to moderate performance in the construction industry as government and private entities continue to invest in the South Korean economy. Demand from automotive sales was also moderate, reporting a decline of approximately 5%, which marginally lowered the downstream demand for hoses, engine gaskets, and sealants. The main factor contributing to the inclination of prices of C9 and C10 Solvents was due to a surge in crude oil prices.

In Germany, prices of C10 solvents exhibited an appreciation of 7%, despite the underperformance of downstream construction, with sales declining by approximately 6%, and the automotive industry with a depreciation of approximately 13% being recorded in July 2023—this which significantly less than the increments discussed in the above-mentioned regions. One of the factors contributing to the rise of prices was attributed to the substantial problems in the supply chain system, with the railway system being underfunded and fluctuation in the water levels of the river Rhine. However, the prime factor was the appreciation of crude oil prices, which increased C9 and C10 prices.

Overall, prices of C9 and C10 solvents witnessed a bullish situation in Southeast Asia, the Middle East, and Europe, with one of the reasons being a solid recovery of the construction industry in Southeast Asia and the Middle East. However, the prime factor in driving up prices of C9 and C10 solvents was the surge in feedstock crude oil prices.

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