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.
For the Quarter Ending June 2022
North America
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.
Asia-Pacific
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.
Europe
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.
Taking pressure from global uncertainties, Butyric Acid prices kept on tracing an uptrend throughout the quarter across the US market. Demand fundamentals for the product from the derivative and pharmaceutical sector-maintained stability as improving economies coupled with soaring input costs accelerated the pace of price revisions in the North American region. Also, geopolitical tension between Russia-Ukraine remained a key driving factor behind this steep rise in prices of feedstock Butyraldehyde in the US market, as WTI and Brent crude oil values rose drastically along with Natural gas during this quarter. As per the assessment, Butyric Acid price hovered around USD 1480/MT in the quarter ending March 2022.
The solvent sector remained firm throughout the first quarter of 2022 across the Asian market, as the demand from the domestic market-maintained stability. During this timeframe, upstream Crude oil soared to a multiyear high in Asia, leading to unprecedented hikes in prices of several commodities, especially the derivatives. Additionally, import halts from China due to the resurgence of Covid-19 have resulted in product scarcity. Thus, tight supplies to the downstream pharmaceutical and intermediate chemical players and increased input costs led to frequent price revisions of Butyric Acid to sustain their margin. The prices were assessed as USD 2363/MT for Butyric Acid CFR Hazira in India towards the end of the quarter.
During this period, the Butyric Acid market exhibited different market sentiments than any other region, as all the regional players had to battle with different complications, especially the Russia-Ukrainian conflict. Rising energy costs remained a major concern for all the key players, as the prices of most of the commodities were increasing owing to an unprecedented surge in raw material and natural gas prices. The reduced consumer spending habits and sluggish demand patterns from the downstream solvent sector with sufficient inventories have hampered the market outlook of Butyric Acid in Europe. The CFR Antwerp negotiations for Belgian Butyric Acid Industrial grade lingered around USD 1650/MT during the month ending in March.
