For the Quarter Ending June 2024
North America
In Q2 2024, the Isopentane market in North America experienced a notable price surge driven by several impactful factors. Despite a decline in Crude Oil prices, Isopentane prices faced significant upward pressure due to improved demand conditions, particularly from the Polystyrene industries downstream. The expansion of the US manufacturing sector in May 2024, following a contraction in April, also contributed to this trend, though the Federal Reserve's decision to maintain interest rates between 5.25% to 5.5% raised concerns about future industrial activities.
The USA, where the most pronounced price changes occurred, demonstrated an overall bullish trend. Seasonal factors, such as severe thunderstorms in Houston and the Gulf Coast disrupting chemical plant operations, exacerbated supply constraints by creating inventory shortages. The automotive sector's recovery, marked by an 8.8% increase in sales, especially in SUVs and pickup trucks, further drove demand for EPS and bolstered Isopentane prices. Additionally, despite a broader decline in spending, improved housing starts in construction activities contributed to increased Isopentane consumption.
Comparing Q2 2024 to the previous quarter, Isopentane prices rose by 6%, indicating a steady and positive pricing environment. Between the first and second halves of the quarter, prices saw a 5% increase, highlighting sustained demand and constrained supply dynamics. Ending the quarter, Isopentane was priced at USD 1766/MT FOB Houston in the USA, solidifying the upward trend throughout the period. Overall, the pricing landscape was notably favourable, driven by recovering demand, supply disruptions, and expansions in key sectors.
APAC
In the second quarter of 2024, Isopentane prices in the APAC region saw a significant rise, driven by several pivotal factors. A notable supply shortage, exacerbated by high freight costs stemming from disruptions in major maritime routes like the Strait of Malacca and Port of Singapore, played a crucial role in pushing prices upwards. These logistical challenges delayed deliveries and increased transportation expenses, contributing to the overall bullish market sentiment. Moreover, a partial resurgence in demand from sectors such as automotive parts packaging and Expanded Polystyrene (EPS) manufacturing intensified supply constraints, further boosting prices.
In India, there was a particularly pronounced surge in Isopentane prices within the region. Despite a 6% decline from the previous quarter, the overall trend remained strongly positive. This increase was driven by low inventory levels, increased demand from the EPS sector, and higher import costs from Europe. Seasonal factors, including reduced working hours due to severe heatwaves and disruptions related to elections, also significantly curtailed domestic production. A comparison between the first and second halves of the quarter revealed an 8% rise, highlighting consistent upward momentum.
The quarter-ending price of Isopentane in India, recorded at USD 1792.85/MT CFR JNPT, underscores a generally favorable pricing environment amid underlying challenges. Notably, there were no reported plant shutdowns during this period. The data from this quarter underscores a strong correlation between constrained supply, rising demand, and resultant price increases, defining the second quarter of 2024 as a period marked by substantial price escalations for Isopentane across the APAC region.
Europe
In the second quarter of 2024, Isopentane prices in Europe followed a strong upward trajectory driven by a variety of factors. Demand surged in the automotive parts packaging sector, particularly for expanded polystyrene (EPS) and extruded polystyrene (XPS) foams, significantly boosting prices despite a decrease in crude oil costs that typically lowers production expenses. This persistent demand surge, coupled with limited supply, maintained a bullish market sentiment. Increased business activities, new orders, and rising employment across the region further supported price hikes, reflecting a positive economic outlook. Although input cost inflation moderated, it remained elevated above pre-pandemic levels, contributing to continued upward price pressures.
Belgium experienced the most significant price changes for Isopentane, with prices rising by 7% compared to the previous quarter in 2024. Supply struggled to meet resurgent demand, intensifying price increases throughout the period. The first half of the quarter saw prices climb by approximately 5%, a trend that continued into the latter half due to seasonal factors and steady demand from the automotive sector. With no major plant shutdowns reported, supply constraints tightened further, culminating in Isopentane prices reaching USD 1801/MT FOB Antwerp by the end of the quarter. This underscored a robust pricing environment driven by strong demand and limited supply conditions.
For the Quarter Ending March 2024
North America
During Q1 2024, the Isopentane market in North America experienced a positive pricing environment, driven by various factors. One of the key factors influencing market prices was the geopolitical tensions, which led to an increase in the benchmark price of crude oil. Additionally, disruptions in the Red Sea caused an increase in freight charges, further impacting the overall cost of the product.
Demand for Isopentane remained overall low throughout the quarter, with construction activity and investment in residential construction declining. However, there was some improvement in demand from downstream industries, particularly in the solvent and fuel additive segments. Looking at the overall trend, prices increased in January and February due to bullish market sentiment and higher production costs. However, prices eased in March due to a decrease in crude oil prices.
In conclusion, the Isopentane market in North America experienced an inclining pricing environment in Q1 2024. Comparing Q1 2024 to the same quarter last year, there was an overall decrease in prices of more than 7%. However, there was an increase in prices around 4.5% compared to the previous quarter.
APAC:
During Q1 2024, the Isopentane market in the APAC region observed a diverse pricing landscape, characterized by notable price fluctuations particularly evident in India. Various factors, including production costs, downstream industry demand, and geopolitical events, influenced the overall trajectory of Isopentane prices in the region. In India, Isopentane prices surged significantly in January, registering a notable 20% increase compared to the previous month. This upswing was primarily fueled by elevated production costs and robust demand from sectors like solvents, and cosmetics. However, February saw a continued but slower price escalation, with around 2% uptick. Geopolitical events, such as the Red Sea crisis and the Ukrainian drone attack on a Russian refinery, exerted pressure on the market, resulting in heightened shipping expenses and increased crude oil prices. Despite these challenges, demand remained steady from the cosmetics, and solvents manufacturing sectors. Examining the broader trend, Isopentane prices in Q1 2024 were lower compared to the corresponding quarter last year. However, there was a positive price change from the previous quarter in 2024, indicating bullish market sentiment. In conclusion, the Isopentane pricing landscape in Q1 2024 across the APAC region showcased predominantly positive trends. Isopentane prices experienced an approximate 5% increase compared to the previous quarter, while witnessing a decrease of more than 9% in the first quarter compared to the same period of the previous year.
Europe:
Throughout Q1 2024, the Isopentane market in Europe witnessed a notable uptick in pricing dynamics. Market sentiment remained bullish as prices surged, driven by a multitude of factors. Various influences shaped the Isopentane market in Europe during this quarter. Geopolitical tensions, exemplified by the Russia-Ukraine conflict, and disruptions in the Red Sea contributed to heightened crude oil prices and increased freight charges. However, subdued demand from downstream industries, evident through declining industrial production output and industrial producer prices, constrained the market's upward momentum. Belgium, experiencing the most significant price fluctuations, saw Isopentane prices commence the quarter at USD 1630/MT FOB Antwerp. March witnessed a 3% price increase, propelled by elevated product costs, including rising crude oil prices and escalated freight charges. Comparatively, Isopentane prices in Q1 2024 exhibited a roughly 16% decrease from the same period last year. Summarizing the Isopentane market in Europe, notably in Belgium, encountered a rising pricing environment throughout Q1 2024. While factors such as heightened crude oil prices and increased freight charges pushed prices upward, subdued demand from downstream industries and potential fluctuations in crude oil prices-imposed limitations on market growth.
For the Quarter Ending December 2023
North America
In North America's Isopentane market during the fourth quarter of 2023, several developments were noted. Initially, a marginal price decline in October was attributed to limited product availability, with demand showing less momentum and merchants focusing on managing existing stock levels.
November witnessed an upward price trend due to moderate demand and increased overseas inquiries. Despite price fluctuations, demand conditions remained consistently average, with a decline in new orders throughout November. The United States experienced the most significant price changes, with a slight improvement in demand leading to higher prices. The Isopentane price in the US market for the fourth quarter of 2023 was USD 1580/MT, FOB Houston, reflecting a 3% increase compared to the previous quarter. Overall, the North American Isopentane market experienced price fluctuations due to factors such as limited supply, steady demand, and increased interest rates.
Additionally, in December, Increased freight expenses and prolonged shipping times affected the petrochemical sectors, which also faced the consequences of higher crude oil prices towards the end of 2023. At the same time, In December 2023, the Manufacturing Purchasing Managers' Index (PMI) for the United States was adjusted downward. The decline in output resumed during this period, and the downturn in new orders accelerated, reflecting weaknesses in both domestic and external demand conditions.
Asia-Pacific
In the APAC region during the fourth quarter of 2023 (October to December), Isopentane prices were influenced by various factors. Firstly, limited Isopentane availability resulted in price increases, driven by restricted supply and lower merchant stock levels, creating a bullish market. Secondly, moderate demand for Isopentane was observed, particularly in downstream industries like refrigerants, solvents, and construction, due to increased purchasing activity during the festive season. Additionally, fluctuating crude oil prices, affecting Isopentane's raw material costs, contributed to the overall price dynamics. In India, where the most significant changes in Isopentane prices occurred, sales surged during the festive period of Dhanteras and Diwali, along with the onset of the marriage season. The anticipation of upcoming festivities and the need for restocking materials further fueled the price increase. However, in December, the rate of expansion in India's manufacturing activity slowed down significantly, reaching an 18-month low. There was a decline in output growth, indicating a reduced level of production within the manufacturing industry. Additionally, new orders, which are crucial for sustaining and driving manufacturing activities, experienced a softening, further contributing to the overall slowdown. The quarter concluded with Isopentane priced at USD 1599/MT CFR JNPT in India.
Europe
The Isopentane market in Europe faced challenges in the fourth quarter of 2023, influenced by factors affecting prices and market dynamics. Market sentiment remained bearish due to weak demand and ample supply, attributed to economic uncertainty, reduced client demand, and customers decreasing stock levels. Declining new orders led to decreased production and overall operating conditions. Although Isopentane availability was moderate, with suppliers cutting stock levels, no plant shutdowns were reported. Belgium experienced significant price changes, with a 3.5% decline in October driven by a downturn in the eurozone's manufacturing sector. However, a marginal price uptick occurred in October due to limited product availability and increased demand. At the same time, the Eurozone Manufacturing PMI showed a slight improvement in December 2023, though it continued to stay in the contractionary phase. The quarter-ending price of Isopentane in Belgium was USD 1650/MT FOB Antwerp, reflecting a 2% decrease from the previous quarter. Overall, the Isopentane market in Europe encountered challenges, including weak demand, ample supply, and declining manufacturing activity, particularly reflected in Belgium's price fluctuations.
For the Quarter Ending September 2023
North America
The price of Isopentane remained weak during the first two months of the third quarter of 2023 but showed an increase toward the end of the quarter. The limited number of new orders came from downstream industries such as solvents, refrigerants, and chemicals. In July, US manufacturers faced ongoing economic fragility, mainly due to a decrease in new orders from both domestic and foreign markets. Despite the challenging economic conditions, there was an increase in employment at the beginning of the third quarter. Manufacturers continued to reduce their inventories due to weak demand, but improved delivery times led to better material availability. While crude oil and naphtha prices remained high, subdued demand affected new purchases and overall production of Isopentane. Towards the end of the quarter, Isopentane prices saw a marginal increase in the US market, driven by limited product availability. Although there was a slight improvement in product demand, the available supply couldn't meet domestic needs. Consequently, domestic manufacturers raised prices in response to increased demand and market conditions. The positive trend in the domestic market was also influenced by rising interest rates. After a prolonged period of low availability, the product stocks had depleted, but the situation changed with increased demand, prompting the need to replenish product supplies. Additionally, the price of the raw material naphtha sharply increased, influenced by fluctuations in upstream crude oil prices. This rise in Naphtha prices significantly impacted downstream industries.
APAC
During the third quarter of 2023, Isopentane prices remained strong, driven by increased demand from downstream industries in the Indian domestic market. Elevated raw material prices, including crude oil and Naphtha in the global market, coupled with rising labor costs, prompted companies to raise their selling prices. Inflation rates were robust but eased to a three-month low. Supplier delivery times saw gradual improvements, and vendor performance was enhanced in the domestic market. Firms responded to the growing demand by intensifying their procurement efforts and replenishing their input inventories throughout the third quarter. The continuous increase in new orders served as a catalyst for production growth by the end of the fiscal quarter. Indian manufacturers held a positive outlook, expecting output volumes to rise over the next 12 months. This optimism contributed to a strong overall sentiment, marking the highest level in 2023 so far. The positive outlook for production and demand translated into ongoing job creation within the manufacturing industry, with employment growth accelerating and remaining robust since August.
Europe
During the first two months of the third quarter of 2023, Isopentane prices remained weak but showed an increase toward the end of the quarter. This occurred despite rising crude and Naphtha prices, primarily due to the underperformance of downstream industries, such as solvents (paints & coatings), chemicals, and refrigerants, within the Belgian market. The weakening of export orders from overseas markets, coupled with the product's oversupply in the local market, contributed to the downward price movement. The presence of high interest rates in the region may have led to reduced new orders from companies, while consumer purchasing power in the market also exhibited signs of decline. Towards the end of the quarter, there was an improvement in product demand, but the available supply fell short of meeting domestic requirements. As a result, domestic manufacturers raised prices in response to increased demand and market conditions. Moreover, there was a slight improvement in consumer confidence compared to the previous month. The extended period of declining availability had depleted product stocks, but September saw a slight uptick in demand, prompting the need to replenish product supplies in the market.
For the Quarter Ending June 2023
North America
Isopentane prices declined throughout the second quarter ending in June 2023. The key factors attributing to the decline in prices were fluctuating prices of upstream crude oil and depreciating demand from the refrigerant market. Further, in an effort to reduce the growing global inflationary pressure the government has raised interest rates high in the region. This has further weakened the buying enthusiasm of consumers. Further, the collapse of two major banks in the U.S. has also impacted the prevailing price trend. Additionally, as indicated by the US Bureau of Labor and Statistics exports from the United States to other countries have declined in the timespan of these three months. The low water level in the Mississippi River caused by high temperature severely impacted the exports consequently leading to stockpiled inventories in the country. This coupled with depreciating demand from the end-user segment paved the way for narrow demand-supply fundamentals in the country. Further, declining economic indicators such as Purchasing Managers Index hinted towards reduced economic activities in the country and potentially affecting Isopentane demand. As indicated by FRED the Purchasing Managers Index depreciated throughout this quarter.
APAC
Pessimistic market sentiments for Isopentane prevail throughout the second quarter of 2023 in the Indian market. Depreciating demand and fluctuating prices of upstream crude oil were the key driving factors behind the pessimistic market sentiments. The price declined by a significant margin of 14.2% in this quarter and settled at INR 1882 in June 2023 on an EX-work basis. Additionally, OPEC-led Saudi Arabia declared at the beginning of this quarter that it would reduce oil output by 500 Mb/d for the rest of the year. This action from Saudi Arabia has also impacted the price of Isopentane globally. However, as indicated by the National Bureau of Statistics and program implementation the Consumer Price Index of the country rose by a margin of 0.1% in the month of May. Further, growing inflationary pressure in China has made consumers hesitant in making bulk purchases during this timeframe. As indicated by the National Bureau of Statistics China, the Purchasing Manager Index is declining and has been recorded at 48.8 in May 2023 after a marginal decline of 0.8% from the previous month along with a decrease in industrial growth rate from 5.6 in April 2023 to 3.5 in May 2023. These declining economic indicators hinted towards reduced economic activity, potentially affecting Isopentane demand.
Europe
Throughout the second quarter of 2023 the prices of Isopentane declined in European market. Depreciating demand from the downstream industries amidst hiked interest rates contributed towards the decline. Further, the ongoing strike in France caused disruptions in supply chains. Henceforth, a sufficient amount of material was available in the European market. This coupled with depreciating demand paved the way for narrowed demand supply fundamentals in the region consequently impacting the price of Isopentane in the region. However, inflation in Germany has slowed down to 5.6% in June from 6.1% in May but is still above the average level. Further, as per data from the German Federal Statistical Office, the Consumers Price Index declined by 0.1% in May from the previous month. Additionally, as per data from Eurostat, the Producers’ Price Index of the region declined to 138.3 in May from 143.4 in March and is expected to decline further. The average decline was 3.6%. These declining economic indicators hinted towards reduced economic activity, potentially affecting Isopentane demand.
