For the Quarter Ending June 2024
North America
In Q2 2024, the North American Butylated Hydroxytoluene (BHT) market experienced stability, influenced by a confluence of factors. Predominantly, weak derivative demand and decreasing production costs were pivotal in impacting prices. The market was further destabilized by volatile crude oil futures and consistent reductions in feedstock prices. Despite significantly curtailed production rates due to overarching market uncertainty, the supply of BHT continued to outpace downstream demand.
The limited cost support from falling feedstock naphtha prices exacerbated a bearish market sentiment among manufacturers. Additionally, lower operational rates and contracting manufacturing activity added to the pricing pressure. Focusing on the USA, which witnessed the most substantial price fluctuations, the overall trend was distinctly downward. Seasonality did not provide the typical uplift, and the consistent decline was evident in the correlation between market dynamics and pricing trends.
Other factors that had an impact on the final prices of BHT were inclusive of the continuous and stable demand outlook from the end-use manufacturing sectors that is pharmaceutical, as a preservatives, rubber, and plastics. On the other hand, the prices are expected to pick up the pace in the coming quarters as the demand volume rises along with the higher production cost.
APAC
In the second quarter of 2024, Butylated Hydroxytoluene prices remained on the positive side steadily due to a favourable demand outlook from the pharmaceutical and rubber industries. India has developed strong markets for cattle and poultry feeds, with growth rates of 15% and 8-9%, respectively, suggesting considerable future potential.
The demand outlook from the pharmaceutical industries remained positive due to the increasing demand. The industry achieved feed-based efficiencies and rationalization because of the presence of integrators, who constituted 70% of the total industry, and a shorter production cycle.
However, the broader scope of the poultry industry and its expansion beyond these regions presented significant opportunities for independent feed producers. The use of compound feed in the layer industry, which ranged from 5 to 25%, was highly underpenetrated, offering substantial growth potential.
Europe
In Q2 2024, the European market for Butylated Hydroxytoluene did not witness much fluctuations reflecting a modest sentiment throughout the quarter. The key factors driving this decline included ample domestic supply, weakened demand from downstream industries, and the fluctuating global prices of naphtha and crude oil. The oversupply of Butylated Hydroxytoluene, combined with steady but not strong demand, led to a supply-demand imbalance that put downward pressure on prices. Additionally, macroeconomic factors such as rising interest rates, inflation, and economic stagnation across Europe further restricted demand, particularly from the construction, automotive, and manufacturing sectors that use Butylated Hydroxytoluene and its derivatives.
Seasonal trends, which usually involve higher activity in warmer months, did not materialize, and increased rainfall disrupted transport routes, exacerbating the situation.
The consistent stagnancy in Butylated Hydroxytoluene prices in Europe during Q2 2024 highlights a challenging pricing environment, heavily influenced by both internal supply-demand dynamics and external economic pressures, leading to a predominantly negative market sentiment.
