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With stronger market sentiments, Butanediol Prices expected to edge high

With stronger market sentiments, Butanediol Prices expected to edge high

  • 29-Mar-2022 3:06 PM
  • Journalist: Peter Schmidt

1,4-Butanediol costs have been steadily rising in the global market for a long time. Domestic manufacturers are experiencing logistical and supply chain constraints, which have resulted in a constant rise in product pricing. Demand from the downstream PBAT resins and PTMEG manufacturing companies has been strong, while demand from the end-user pharmaceuticals has also been robust in recent weeks. Other problems, such as inflationary and cost pressures and predictions about trading activities that the Russia-Ukraine conflict could hamper, have kept prices higher.

The price of Butanediol continued to remain upwards in the third quarter of 2022, despite the ease of obtaining raw materials following the Chinese government's lifting of electricity rationing in the last quarter. The supply outlook is insufficient compared to the strong demand from downstream industries. Due to increasing demand, several facilities were hesitant to boost operational rates because it would reduce the production margin significantly. Concerns about rising inflation in the market have resurfaced in the current situation in Russia and Ukraine, and crude prices in Europe have once again increased.

As the freight rates across the globe have surged to record-breaking heights, this has considerably affected the supply of solvents in the domestic market. Traders were making their product's edge higher at appreciable rates amidst apparent downstream demand to benefit from the exacerbated supply shortage.

The manufacturers of products like Butanediol are feeling the pinch. Several downstream players hurried to secure the volumes for Butanediol as a result. The supply-demand imbalance began to grow. Several Butanediol manufacturers and downstream players in Northeast Asia, such as Asahi Kasei, Ashland Taxilong, and Sun Chemical, have significantly increased their offers.

As per ChemAnalyst, "Due to the current Butanediol market tightness in the Asia Pacific and North America in April, the output is predicted to remain low, with demand expected to remain high throughout Q2. It is expected that Butanediol offerings would see significant increases in the provided quotations in the global market."

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