For the Quarter Ending June 2023
The price of Butyric Acid saw a sharp decline in the US market throughout the second quarter of 2023. The merchants continued to work through their existing stocks in the domestic market. The demand for the product did not rise due to the sufficient availability to meet the requirements of the downstream pharma, food processing, and chemical industries. Manufacturers saw a decline in fresh orders, and companies reported difficulties in receiving new business as consumers continued to consume their existing inventories with muted consumer confidence. The slowdown in consumer spending reflects cooling demand for Butyric acid in the downstream sectors. At the conclusion of the second quarter, the greater success in finding suitable candidates allowed firms to expand their workforce number in June, despite concerns about the future demand conditions. Overseas sales had dropped notably, and the domestic market remained deteriorating during this period. The price of Butyric Acid hovered around USD 1472/MT on a FOB Houston basis at the end of the second quarter of 2023.
The price of Butyric Acid saw an incline trend for the first two months of the second quarter due to the more inquiries received from the downstream industries across the Asian market. Enterprises were restocking the material to satisfy the downstream requirements during this period. In June, the Butyric Acid market saw a sudden decline in the Asian market, and the markets were not receiving new work orders among the enterprises and were working on the existing stocks. In addition, the low-cost pressure from feedstock Propylene attributed to stabilizing the product price. The Pharma and food processing industry remained flat during June due to low trading activities, which indicates the requirements of Butyric Acid were reduced owing to the sufficient supply in the market. The procurement sentiments declined, and the market saw a wait-and-see approach in China. There was a weakening domestic economy and export expectations due to the uncertain global demand and ongoing trade frictions with the US. China's manufacturing activity contracted for a third straight month in June, albeit at a slower pace.
In the second quarter of 2023, the cost of Butyric Acid remained in a weak pattern due to the low demand from the downstream Pharma, food processing, and chemical industries. Factory output was constrained by weakness in demand as inflationary pressures and overstocked client warehouses led new orders to fall sharply. Subsequently, backlogs of work depleted amid attempts to prevent additional production cutbacks. French factories also highlighted sharply falling new business throughout the second quarter of 2023. Falling input demand helped boost material supplies at vendors, speeding up delivery times and alleviating cost pressures. In addition, falling new sales was a notable headwind to manufacturers in Q2. The demand for Butyric Acid did not improve in the market for the past three months due to the economic uncertainty in France. The companies indicated a renewed drop-in activity, citing inflation and challenging financial conditions as reasons that led to lower business activity. Companies attributed the drop in sales volumes to pressures from inflation, competition, and higher interest rates.
For the Quarter Ending March 2023
In the first quarter of 2023, the Butyric Acid market showed mixed sentiment. Initially, the prices of Butyric Acid declined in January due to an abundant supply of the product and weak cost pressure from feedstock Propylene in the USA market. Suddenly the price of Butyric Acid sharply inclined for the rest of the quarter due to high-cost pressure from propylene, and demand started to improve from the downstream industries such as pharma and cosmetics. Additionally, the cost support from crude oil prices, which increased after the US Federal Reserve announced an anticipated increase in interest rates, contributed to the price move upward. As a result, the price of Butyric Acid was evaluated at USD 1762/MT on a FOB Houston basis during March 2023.
Butyric Acid prices in the Asia-Pacific region exhibited mixed trends during the first quarter of 2023. The first month of the quarter saw a decline in market value due to the weak procurement activities from the downstream cosmetics and animal feedstock industries. After the Lunar holidays, the buying sentiment from the end-users surged, and the demand for the product was improved from the domestic and overseas markets. Due to this, the manufacturer quoted a high price in the market. In March, the upstream Propylene prices were reduced, and the demand for the product was diminished due to poor buying sentiments from the downstream industries. As a result, the price of Butyric Acid was evaluated at USD 1367/MT on a FOB Shanghai basis during March 2023.
During the first quarter of 2023, the cost of Butyric Acid witnessed an inclining trend due to moderate demand from the downstream cosmetics and other key driving sectors in the European region. The propylene market upstream had an uptick, which had an impact on downstream products like butyric acid. Additionally, the market value of butyric acid was impacted by inflation and high-interest rates. The demand for the cosmetic industry was improved slightly, and the consumption of the product was expanded in the European market. As a result, the price of Butyric Acid was evaluated at USD 2262/MT on an FD Le Havre basis during March 2023.
For the Quarter Ending December 2022
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.
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.
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
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.
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.
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.