For the Quarter Ending March 2025
North America
The North American MTO market exhibited a mixed performance in Q1 2025. Supply remained stable throughout the quarter, with excess inventories preventing price hikes despite weak feedstock market activity and low-priced imports. Freight rate surges from Asia had a minimal impact due to abundant supply and subdued demand. Demand from the downstream paints and coatings sector was weak, largely due to severe winter disruptions in construction activity and delayed projects.
MTO supply continued to be adequate with steady domestic production and lower freight costs. However, competition in the global market increased, with capacity additions in China impacting the market. Severe cold weather disrupted petrochemical operations, but facilities began to normalize. Demand remained weak in the construction and coatings industries due to challenges in the housing market and delayed projects.
Overall, MTO prices remained stable amid weak feedstock prices and reduced demand from the paints and coatings sector. Global supply oversaturation and intensified export competition contributed to continued price declines. While U.S. manufacturing activity showed slight improvement, construction sector demand remained weak, dampening the MTO market prospects.
APAC
The APAC Mineral Turpentine Oil (MTO) market experienced a mostly bullish trend in Q1 2025, with prices witnessing a net gain of approximately 2.5% by the end of the quarter. January began with stable prices, but a rise in production costs driven by increasing crude oil prices exerted upward pressure. This was passed on to downstream buyers, with demand receiving partial support from the wedding season, although the construction sector remained sluggish. In February, MTO prices increased slightly due to tight supply amid low inventory levels, despite a decline in crude oil prices. Production costs fell, but limited supply due to refinery turnarounds and increased exports contributed to higher prices. However, demand remained subdued, especially after the wedding season concluded, and lower residential real estate activity continued to dampen market prospects. In March, prices declined, driven by a decrease in crude oil costs and strong supply-side fundamentals. Major suppliers implemented price reductions, contributing to the bearish trend. Weak demand from the paints and coatings and construction sectors further pressured the market, resulting in cautious procurement activity.
Europe
The European MTO market exhibited a mixed performance in Q1 2025. Supply remained stable throughout the quarter, with excess inventories preventing price hikes despite weak feedstock market activity and low-priced imports. Freight rate surges from Asia had a minimal impact due to abundant supply and subdued demand. Demand from the downstream paints and coatings sector was weak, largely due to severe winter disruptions in construction activity and delayed projects. MTO supply continued to be adequate with steady domestic production and lower freight costs. However, competition in the global market increased, with capacity additions in China impacting the market. Severe cold weather disrupted petrochemical operations, but facilities began to normalize. Demand remained weak in the construction and coatings industries due to challenges in the housing market and delayed projects. Overall, MTO prices remained stable amid weak feedstock prices and reduced demand from the paints and coatings sector. Global supply oversaturation and intensified export competition contributed to continued price declines. While European manufacturing activity showed slight improvement, construction sector demand remained weak, dampening the MTO market prospects.
For the Quarter Ending December 2024
North America
The North American Mineral Turpentine Oil (MTO) market experienced mixed conditions during Q4 2024 due to rising feedstock Crude Oil prices and various supply disruptions. Crude Oil prices increased by approximately 2%, but later depreciated by around 1%, which continued to influence MTO production costs. The first month of the quarter was impacted by unfavorable import conditions, including a strike between USMX and ILA that caused delays in unloading ships and increased lead times, further driving up prices. Throughout most of the quarter, US suppliers primarily relied on existing inventories, with the hurricane season extending until November 2024.
By the end of the quarter, the market turned bearish, dominated by liquidation activities as suppliers sought to clear stock. Demand remained sluggish, particularly in the construction sector, which showed minimal fluctuations and prevented any significant recovery.
As the year closed, US suppliers continued liquidating inventories to avoid inventory devaluation and mitigate year-end tax repercussions.
APAC
The APAC MTO market experienced a mixed trend in Q4 2024, with prices dropping by 8.5% before recovering by 5.3% in December. A 3% rise in crude oil prices in October had little impact on MTO prices, despite higher import volumes due to increased availability of Urals crude. However, total crude oil imports decreased by 8% month-on-month and 6% year-on-year, averaging 4.31 million barrels per day (mb/d). MTO production reached 3 million metric tons (MMT), while consumption was only 0.8 MMT, resulting in ample supply and subdued pricing.
In November, crude oil prices depreciated by 4%, further lowering MTO prices. Refinery runs increased by 250,000 barrels per day, raising production to 3 MMT, while consumption remained steady. Market expectations indicated continued increases in production, maintaining downward price pressure.
By December, MTO production costs remained stable, supported by steady crude oil prices. However, crude oil imports showed a slight 0.5% increase, with a 17% drop in Russian crude imports. As regional supplies ran low and producers hesitated to further lower prices due to ongoing declines, BPCL revised its prices upwards, contributing to a recovery in the market.
Europe
The European MTO market witnessed mixed trends, predominantly following a bearish market situation. While supplies from the APAC region remained constrained, the European market continued to experience ample availability of the product. Demand from downstream industries, especially paints and coatings, remained sluggish, with minimal off-takes observed across the region. Midway through the quarter, trading activities were subdued, further hindered by strikes and disruptions at key ports in Northwest Europe, which caused delays in circulation and impacted logistics.
As the quarter advanced, liquidation activities gained momentum, with market participants focusing on clearing excess inventories ahead of the festive holiday period. Despite the ongoing challenges, the market was largely supported by limited supply disruptions and no major outages, ensuring a stable flow of product into the region.
By the end of the quarter, the overall market sentiment remained predominantly bearish. The combination of weak demand from key downstream sectors and the continued availability of sufficient supplies kept the market in a steady but downward trend. This balance between available stock and subdued demand resulted in a cautious outlook as the year ended, with expectations of further challenges in the upcoming quarter.
For the Quarter Ending September 2024
North America
The North American Mineral Turpentine Oil (MTO) market faced a bearish situation during the quarter, largely driven by a 13% decline in crude oil prices. Despite this price drop, MTO production in the US remained low due to reduced refinery rates. According to data from the EIA, average refinery run rates decreased from 92.7% in July to 92.2% in August, and further to 90.8% in September 2024, as the ongoing hurricane season prompted cautious operational measures across US refineries. Some facilities even declared force majeure due to damage from Hurricanes Beryl and Francine, further contributing to the low production levels of MTO.
Demand conditions from the downstream paints and coatings industries were unfavourable, impacted by seasonal factors and high mortgage rates that dampened homebuying prospects. As the quarter progressed, uncertainty loomed over the market due to upcoming elections, leading to suppliers receiving only small quantities of orders.
This combination of low production, weak demand, and market uncertainty created a challenging environment for the Mineral Turpentine Oil market in North America.
APAC
The Asian Mineral Turpentine Oil (MTO) market experienced notable fluctuations during the third quarter of 2024. Overall, MTO prices remained stable, exhibiting a variation of approximately 0.8%. In the opening month of the quarter, reduced production amidst higher consumption drove a bullish market, with active restocking ahead of the festive season contributing to rising prices. However, the market soon shifted to a bearish trend as production costs decreased, largely due to a 13.5% decline in crude oil prices, which lowered MTO production costs. Additionally, several refineries that underwent maintenance in the earlier part of the quarter returned to production, improving domestic supply levels. This bearish market situation was further exacerbated by the underwhelming performance of the downstream construction industry, particularly during the monsoon season, which dampened demand prospects. Even after the monsoon season, recovery was reported as sluggish, continuing to exert downward pressure on the MTO market. As a result, the combination of increased supply and weakened demand contributed to a more challenging market environment for Mineral Turpentine Oil across the region.
Europe
The European Mineral Turpentine Oil (MTO) market experienced a bearish trend throughout the quarter, primarily driven by unfavourable demand conditions from the downstream construction sector and a 13% depreciation in crude oil prices, which eased production costs. Despite this, MTO supplies across Europe remained moderate due to several refineries undergoing maintenance turnarounds, limiting production capacity. Major firms conducted strategic reviews of their assets, leading to refinery closures and a subsequent reduction in domestic supplies. Additionally, strikes in Germany and various other regions threatened export conditions, compounded by the worsening crisis in the Red Sea, which resulted in inventory accumulation at ports and further pressured prices downward. The ongoing downturn in the construction sector persisted, with investment sentiments remaining historically low, leading to a lack of incoming work for European contractors. Consequently, many suppliers opted to destock construction materials in response to deteriorating demand conditions. Overall, these factors created a challenging environment for the MTO market in Europe, characterized by reduced production, weakened demand, and declining prices.
For the Quarter Ending June 2024
North America
The second quarter of 2024 has stabilized in the Mineral Turpentine Oil (MTO) market in North America, marked by a mixed trend in prices during this quarter. The decline in MTO prices in May 2024 has been influenced by several significant factors, primarily the reduction in crude oil costs and oversupply conditions. The depreciation in the prices of upstream has notably eased production costs, contributing to lower MTO prices. Furthermore, an oversupplied market condition, driven by excess inventories and high stockpiles of MTO, exacerbated the price decline.
Turning to June 2024, the end of the second quarter witnessed prices of MTO increase by approximately 2.6% due to heightened production costs and cautious operations across the US Gulf Coast and Louisiana despite demand conditions being largely unfavorable from the downstream construction market. The increment in the prices is further attributed to lengthened delivery times and higher transportation costs which further pushed the prices of MTO on the higher end. Higher mortgage rates are expected to further cast a negative sentiment for the transactions in the downstream construction industry keeping overall demand conditions moderate. The procurement activities from the industrial application remained positive for the time being.
The correlation between reduced upstream prices and slow downstream demand was evidence of stability in the MTO prices. Disruptions such as issues with maritime transportation and highway insecurity further complicated the supply chain, adding to the tightening of supplies in the US MTO market.
APAC
The second quarter of 2024 witnessed a notable depreciation in the prices of Mineral Turpentine Oil (MTO) across the APAC region. This quarter was characterized by a culmination of various factors that collectively influenced market prices. Foremost among these was the substantial reduction in feedstock Crude Oil prices, which saw a depreciation of approximately 7% globally. This reduction in production costs, however, did not translate directly into lower MTO prices due to pressures from downstream activities, particularly in construction and exports of petroleum products. Additionally, the market grappled with moderate inventory levels and a relatively softer turnaround in manufacturing activities, further squeezing profit margins. In India, the price dynamics of MTO saw the most significant price fluctuations, driven by a combination of strong demand from the downstream paints and coating industry and infrastructural development activities during May 2024. Despite the positive demand, India's MTO pricing environment was predominantly bearish due to an oversupplied market. The production disruptions due to extreme heat waves and reduced working hours exacerbated the supply situation. Overall, the price trend for MTO in India reflected a declining sentiment. The quarter concluded with the price of MTO at USD 988/KL, Ex-Mumbai, signaling a negative pricing environment. No specific plant shutdowns were reported during this quarter, but the cumulative effect of the aforementioned factors led to a challenging pricing scenario for MTO in the APAC region, particularly in India.
Europe
In the second quarter of 2024, the European Mineral Turpentine Oil (MTO) market experienced significant price decreases due to several adverse factors. This period saw declining crude oil prices, which lowered production costs for MTO. Additionally, the market faced an oversupply from the influx of inexpensive imports from neighboring regions. Despite moderate demand from the downstream construction sector, the overall pricing environment remained negative as supply consistently exceeded demand. Seasonal rainy weather further reduced construction activities, impacting MTO demand. In Germany, the MTO market was particularly strained, with a marked decline in downstream demand. The country experienced a sharp contraction in the construction sector for the second consecutive month, exacerbated by logistical challenges due to severe flooding, further hindering market circulation. Consequently, the German market saw the most substantial price changes within the region. The overall trend reflected a consistent downward trajectory, heavily influenced by both excess supply and weakened demand conditions.
