For the Quarter Ending March 2024
North America
During Q1 2024, the n-Butylene market in North America experienced volatility in the pricing dynamics shaped by a variety of influential factors. While the overall pricing trend in the region exhibited a slight increase, it is crucial to highlight the situation in the USA, where the market encountered the most pronounced price fluctuations. The market in the USA displayed a bullish sentiment throughout the quarter, primarily driven by strong demand coupled with a constrained domestic supply.
This supply limitation was largely due to low production rates among n-Butylene producers. A significant increase in demand was noted particularly from the construction sector, which is undergoing an expansion phase. This growth in the construction sector has boosted demand for N-Butylene derivatives, especially in applications such as tire manufacturing, where there is a growing emphasis on lightweight and fuel-efficient vehicles. The heightened demand from both the construction and automotive sectors significantly impacted the prices of key b-Butylene derivatives like Methyl Tert-Butyl Ether (MTBE) and butyl rubber. These derivatives saw substantial price increases due to their critical roles in these expanding industries.
Additionally, challenges related to the limited availability of feedstock and logistical issues exacerbated the upward pressure on prices. These factors collectively contributed to the tightening of the market, further fuelling the price increases observed during the quarter. Overall, the n-Butylene market in North America, particularly in the USA, navigated through a complex array of factors that not only drove up demand but also led to a tightening of supply, resulting in upward pricing trends.
APAC
In Q1 2024, the n-Butylene market in the APAC region experienced a bullish of factors that collectively influenced market prices, primarily driving an upward trend. The primary drivers of this trend were high demand paired with low supply dynamics throughout the region. One notable factor affecting the market was the low availability of supplies, which contributed to a tight supply situation and subsequently impacted prices. The limited stock levels were a significant constraint, pushing prices upward as demand outpaced available supplies. Despite a general slowdown in the expansion of manufacturing sector activities, market sentiments showed signs of improvement towards the end of the quarter. Specifically, demand from butyl rubber producers saw a notable increase, driven by robust demand from the automotive sector. This surge in demand helped stabilize and support prices, offsetting some of the downward pressures from other sectors. In terms of specific price movements, there was a slight overall increase in n-Butylene prices compared to the previous quarter. In India, a key market within the APAC region, prices exhibited some volatility: there was an initial increase of 2.2% at the start of the quarter, followed by a decrease of 1.4% towards the end. Despite these fluctuations, the market sentiment in India remained largely bullish throughout the quarter.
Europe
In Q1 2024, the n-Butylene market in Europe experienced a bullish pattern as the feedstock Ethylene prices skyrocketed. Market sentiment throughout the quarter remained robust, reflecting a generally positive outlook for n-Butylene demand across the region. This optimism, however, faced challenges from the supply side, where the market grappled with low inventory levels and diminished production capacity. Such constraints were exacerbated by strategic bulk purchasing decisions made by buyers aiming to secure necessary supplies amidst tightening market conditions. This intensified the existing supply-demand imbalances, contributing significantly to the upward trend in pricing. Additionally, feedstock shortages emerged as a key factor exerting further upward pressure on prices. These shortages led to an overall market imbalance, straining the ability of suppliers to meet the robust demand efficiently. The influence of seasonality was also apparent, with an anticipated increase in demand from key sectors such as automotive and construction, which typically see growth as temperatures improve. This comprehensive analysis of the n-Butylene market in Europe for Q1 2024 highlights the nuanced interplay of factors influencing pricing dynamics.
For the Quarter Ending December 2023
North America
The n-butylene price trend witnessed a bearish movement in North America during the fourth quarter of 2023 amid depressed demand and procurement activities from end-user industries. Initially, the demand remained low from the domestic downstream industries as the operating rates were moderate in Butyl Rubber industries amid declined orders from the Automotive sector amid the United Auto Workers (UAW) strike.
However, during the mid-quarter, dry weather conditions because of the El Nina effect decreased the Panama Canal water levels and resulted in a decline in Cargo rates. At the same time, the decline in the USA's manufacturing sector's Purchasing Manager's Index indicated a contraction in manufacturing sector activities, leading to low demand from the Butyl Rubber and Polyisobutylene industries.
Furthermore, the feedstock Ethylene availability improved amid a reduction in the upstream Naphtha and Crude Oil prices after the resumed refinery operations and increased refining capacity in the region, which negatively impacted the production costs of n-butylene. Towards the end of the quarter, supply rates improved as heavy rainfall in the region increased the water levels of the Panama Canal and shipping activities. At that time, the orders were sluggish from the Polyisobutylene producers throughout the month due to depressed demand and reduced trading activities in the country, and producers decreased the n-Butylene prices.
Asia
In the fourth quarter of 2023, n-butylene prices witnessed consistent reductions in the APAC region due to underwhelming sentiments from the buyers as the demand for n-butylene remained low throughout the quarter due to depressed consumption rates from end-user industries, particularly in the automotive sector. In China, the production rates were moderate, while the demand remained low from the domestic downstream industries as the operating rates declined in the Butyl Rubber and Polyisobutylene industries amid declined orders after the Golden Week holidays. Meanwhile, the cost support for n-Butylene from the feedstock Ethylene declined during the mid-quarter. This was due to reduced offtakes from Glycol industries, which improved the availability of Ethylene and lowered production costs. Additionally, the reduction in upstream Naphtha and Crude Oil prices further contributed to the decrease in production costs. At that time, orders remained low from the Polyisobutylene manufacturers amid reduced buying and procurement activities amid weak demand from Polymer industries. Towards the end, the inventory levels product availability was moderate amid an improvement in demand from Butyl Rubber industries due to increased consumption in the Automotive sector.
Europe
Like the North American region, the n-butylene prices in the European region witnessed bearish movement. At the beginning of the quarter, consumption rates were low from Butyl Rubber industries amid declined orders from the Automotive sector. Similarly, inquiries were low from Polyisobutylene producers as well amid excess availability of supplies. It resulted in increased inventory levels of n-butylene. During the mid-quarter, orders remained low from the Polyisobutylene manufacturers amid reduced buying and procurement activities amid weak demand from Polymer industries. Simultaneously, the decrease in feedstock Ethylene offtakes from downstream Glycol industries led to a reduction in the cost support from Ethylene and negatively impacted the production costs of n-butylene. Towards the end of the quarter, the market did not showcase any significant improvement in inquiries amid the ongoing economic slowdown in the region. At the same time, the feedstock Ethylene prices decreased during the month because of increased inventories amid sluggish offtakes from downstream industries and reduced production costs of n-Butylene.
