For the Quarter Ending December 2022
North America
Butyric acid markets in North America experienced the same pattern as those in the Asia-Pacific region this quarter. The moderate demand for this product from companies downstream had an impact on the product's prices and were also influenced by the decrease in costs of upstream crude oil. Despite these factors, there weren’t any significant plant shutdowns. The price of this product in the United States was stable in the early days of this quarter, increased in the third week of October, and then returned to stability. However, prices began to fall in the second week of November, remained low for a while, and then continued to fall until the quarter's end.
APAC
The price of butyric acid had decreased even further in the Asia-Pacific region, in the final quarter of 2022. The lowered prices of propylene and syngas, which are the base materials used in the production of this product, and the average interest in this product exhibited by pharmaceutical, animal feedstock, and cosmetic companies for downstream processing were the two primary factors that contributed to the decline in butyric acid prices in India. In the case of China, the persistence of Covid- 19 restrictions contributed to the decrease in the price of this product. As a result, production activities in both the upstream (yet there weren’t any plant closures of this product recorded) and downstream industries were hampered, and as a result, buyers placed fewer orders for this product.
Europe
European markets saw price reductions for butyric acid as well. The demand for this product was significantly influenced by a number of factors. As per market members, worries about inflation, the continuous clash among Russia and Ukraine, and increasing natural gas costs were influencing the businesses in petrochemicals domain, due to which both upstream and downstream organizations showed normal interest for this commodity. In addition, this product's prices were impacted by the moderate performance of the propylene and upstream crude oil markets. However, there appeared to be no plant closures of entities involved in the production butyric acid.
For the Quarter Ending September 2022
North America
The North American markets of Butyric acid, too, did experience an identical trend to the one that Asia – Pacific markets had seen this quarter. The prices of this product were heavily influenced by the decline in costs of upstream crude oil, and the moderate demand for this product from downstream companies also had an impact on the prices of this product. In the U.S., the price of this product was in constant decline in the initial days of this quarter; however, the prices became idle from 12th August onwards till the third week of September 2022 because of the stability in the demand-supply ratio of this product. So, Butyric acid concluded its market in the U.S. at USD 1,370 per MT on FOB – Houston basis.
APAC
Butyric Acid has witnessed a further reduction in costs in the Asia – Pacific region. In India, Butyric acid prices were brought down because of two main reasons, the one being the lowered prices of propylene and syngas, base materials used in the production of this product, and the other being the average interest for this product exhibited by pharma, animal feedstock, and cosmetic companies for downstream processing. In the case of China, the drop in the cost of this product was because of acute power shortages, which made both upstream and downstream companies completely halt or lower their production rates. The enactment of zero covid strategies by governments in China, too, did influence the manufacturing activities and the price of this product. Hence, in China, Butyric acid closed its market this quarter at USD 1,555 per MT on FOB – Shanghai basis.
Europe
Butyric acid experienced a reduction in price in the European markets as well. Several factors had a significant impact on the demand for petrochemicals. According to market participants, consumer concerns about inflation, the ongoing conflict between Russia and Ukraine, and an approaching energy crisis were affecting petrochemical demand. Additionally, customers found it difficult to pass on ongoing cost increases due to supply chain delays. In France, butyric acid opened its market with a mild increase in cost and later witnessed a constant fall till the end of this quarter, ending its market at USD 2,600 per MT on FD – Le Havre basis.
In the second quarter of 2022, the price of Butyric Acid increased trend movement throughout the quarter. The upstream raw material Butyraldehyde rose due to increased propylene prices. Manufacturers have raised market quotation prices due to tight supply and strong demand from downstream industries, and the OQ chemical company has revised Butyric Acid prices in North America. The freight rates index stood in the market due to the war between Russia and Ukraine, although the United States is the largest exporter of Butyric Acid. USA restricted business with Russia affected the crude oil commodities price hike.
In the Asian region, the price of Butyric Acid has shown mixed trend movement throughout the second quarter. At the beginning of April and May, the upstream Butyraldehyde price soared in the region, leading to the prices of downstream Butyric Acid. Additionally, persistent port congestion in Asia led to crippling product availability across the Indian market. In the meantime, freight charges further inclined amid increased demand for Crude oil from the United States, Europe, and Asia. In mid of June, the decrease in crude oil prices and less demand from pharma, animal feed, and cosmetics plunged the price of Butyric Acid. The percentage declination of Butyric Acid in India was recorded at 2% on an Ex-Hazira basis during the quarter.
Throughout the second quarter, the price of Butyric Acid has been volatile in the European market. Due to tight supply and sufficient demand from end-users, the OQ chemicals have raised the price of Butyric Acid in the entire European region. The disruptions in supply and high crude oil prices further increase the cost of Butyric Acid. High production costs due to European countries limited Russia’s oil and gas imports. Butyric Acid prices in the regional market rose due to increased demand from the pharmaceutical and animal feed industries. Product costs increased as inventories were depleted.
