For the Quarter Ending March 2023
North America
n-butylene and Isobutylene prices showed mixed trends in the USA market during the first quarter of 2023. During January and February, n-butylene and Isobutylene prices increased due to improved buying sentiments in the market. Demand from the downstream Polyisobutylene industries has been boosted in the domestic market, which further contributes to the high prices of Isobutylene. In addition, cost pressure from the feedstock Tertiary Butyl Alcohol has been firmed, which resulted in the high production cost of Isobutylene. In addition, LyondellBasell Industries performs Final Commissioning for a new 2.2 billion Lbs/yr Tertiary Butyl Alcohol (TBA) (feedstock for Isobutylene) unit in Channelview, TX. The units are expected to be operational in late March or early April, which is anticipated to increase the feedstock availability in the USA market. Despite this, Isobutylene prices declined in the domestic market during March as the demand outlook for the product remained on the lower edge along with weak productional capacity. In addition, the purchasing manager’s index dropped from 47.7 to 46.3 in March, signifying a contraction in both industrial and manufacturing activity. Furthermore, suppliers had enough to cater to the domestic market demand. Thus, prices of n-butylene and Isobutylene FD Texas were assessed at USD 1129/MT during March.
Asia-Pacific
Prices of n-butylene and Isobutylene have increased in China market throughout the first quarter of 2023. The increase in procurement reported from the downstream Polyisobutylene industries has impacted the price value chain of Isobutylene in the Chinese domestic market. Thus, as a result of strong downstream demand, the manufacturers were compelled to revise their offers to gain some profit margins. In addition, the cost support from feedstock TBA (Tertiary Butyl Alcohol) was sufficient to cause an upshift in the price realizations of Isobutylene in the domestic market. At the same time, the manufacturing activity experienced a slower expansion in March. This can be attributed to the slower-than-expected economic recovery of the regional bellwether China following its reopening from the pandemic. Thus, prices of n-butylene and Isobutylene FOB Qingdao were assessed at USD 1306/MT during March 2023.
Europe
Prices of n-butylene and Isobutylene have continued to increase after the holidays in the European market throughout the first quarter of 2023. The incline in the prices was attributed to the improved demand from the downstream Polyisobutylene industries. Market participants reported a sharp rise in queries from the end-user. Although, feedstock Tertiary Butyl Alcohol has shown fluctuation throughout the quarter. Meanwhile, imports from the Asian market have comparatively higher than the domestic prices as prices increase in the exporting countries. In addition, according to ifo Business Climate Index, raised from 91.1 to 93.2 in March, compared with the previous month. Thus, prices of n-butylene and Isobutylene FD Hamburg were settled at USD 1201/MT during March 2023.
For the Quarter Ending December 2022
North America
Isobutylene prices showed fluctuation in the USA market during the fourth quarter of 2022. During the H1 of 2022, Isobutylene prices raised slightly due to the high inflation and turmoil in energy prices. Demand from the downstream Polyisobutylene and allied industries have been stable in the domestic market. However, during the H2 of 2022, consumer sentiment has declined in the region, which has been vindicated by the decrease in the Manufacturing Purchasing Index, which dipped below 50 (i.e.; 49.7) in November, signifying contraction in both industrial and manufacturing activity. The holiday season further contributed to the bearish demand dynamics in the regional market. Furthermore, cheap Asian imports lead to a price drop in the regional market. Overall, demand from the downstream Polyisobutylene and other competitive industries has declined due to the seasonal dullness, while the ample material availability weighed down the prices of Isobutylene in the regional market. As a result, prices of Isobutylene FD Texas were settled at USD 1107/MT during December.
Asia- Pacific
In China, prices of Isobutylene showed fluctuation during the fourth quarter of 2022. During October, prices of Isobutylene showed stability, backed by the sufficient inventory level and stable consumption from the downstream Polyisobutylene industries. However, despite the looming shadow of Covid in the Chinese market, Isobutylene prices have remained on a downward trend owing to the weak demand dynamics. Furthermore, China witnessed severe lockdown during the "Zero Covid Policy," which impacted the manufacturing and logistics activity in the region. Demand from the downstream industries has remained sluggish in the domestic market, while the consumption rates from the international market have also been on the weak side ahead of the impending holiday season in the West and soft consumer sentiments, which overwhelmed the demand dynamics during 2022. Thus, prices of Isobutylene FOB Qingdao were assessed at USD 1213/MT during December.
Europe
Prices of Isobutylene have witnessed mixed sentiments in the European market during the fourth quarter of 2022. During the first half of 2022, Isobutylene prices have increased marginally due to the high inflation and volatile energy prices in the regional market. The supply chains in the region were disrupted amid prolonged port congestions and vessel bunching, which halted the supply flow of Isobutylene and, thus, limited the product's availability in the market. Meanwhile, demand from the downstream Polyisobutylene and other competitive industries has been stable. Although, during the second half of 2022, Isobutylene prices have gained a downward momentum backed by the sharp decline in freight charges, resulting in better-imported availability in the regional market. In terms of domestic production cost, operating rates remained under check amid weak demand dynamics from the downstream Polyisobutylene and other competitive industries. Also, the threat of recession across Europe has eased. As per the data, inflation dropped from 10.1% to 9.1% in December. Thus, at the conclusion of Q4, in Germany, Isobutylene FOB Hamburg was assessed at USD 1125/MT during December.
For the Quarter Ending September 2022
North America
During the third quarter of 2022, n-butylene and Isobutylene prices showed mixed sentiments in the North American region. In the initial part of the third quarter, the Isobutylene price rise by 2.6%. Bullish sentiment in the feedstock, turmoil in the energy market, and a high inflation rate contributed to the high Isobutylene prices across the regional market. However, Butadiene prices shifted marginally towards a downward trend during the mid-quarter of Q3, supported by abundant inventories coupled with weak demand from the downstream derivative Polyisobutylene industries. Although, during the end of Q3, demand from the downstream Polyisobutylene industries slightly revived, which resulted in the Isobutylene prices increasing in the USA market. In addition, the US market has struggled with contradictory logistics, as interior rail hubs causing a container backlog at Long Beach port have affected the supply chain. Hence, as of result, prices of Isobutylene FD Texas were USD 1166/MT with a monthly decline of 3.2% during September.
Asia- Pacific
n-butylene and Isobutylene prices have showcased fluctuation in the Asia- Pacific region during the third quarter of 2022. In July, prices of Isobutylene increased by 2.4% in the China domestic market owing to the limited inventory level coupled with improved demand from the downstream Polyisobutylene industries. At the same time, demand from the international market has also increased, which raised the prices of Isobutylene. However, during the mid of Q3, prices plunged by 2.7% due to the weak feedstock Tertiary Butyl Alcohol prices. In addition, low offtakes from the downstream derivative Polyisobutylene industries have further led to the price drop of Isobutylene. Although, during the end of Q3, Isobutylene prices gained upward momentum due to the high production cost amid soaring energy prices. In contrast, demand from the downstream derivative and other allied industries has remained bearish. As a result, prices of Isobutylene FOB Qingdao were assessed at USD 1277/MT with a monthly inclination of 4.6% during September.
Europe
Prices of n-butylene and Isobutylene have showcased a see-saw trend in the European market during the third quarter of 2022. During July, prices gained momentum upward in the German market. The domestic cost of production remains higher due to increased energy and operating costs, resulting in weak output rates. In contrast, demand from the downstream derivative polyisobutylene industries has been stable to weak. However, during the mid-Q3, Isobutylene prices dropped by 4.5%, owing to the sufficient inventory level and weak demand from the downstream industries. The steady flows of cheap imports from the Asian and North American regions have led to the price drop in Isobutylene. Although, throughout Q3, prices of the domestically produced material remained on the higher side on the back of the high production cost. Hence, as a result, prices of Isobutylene FD Hamburg were assessed at USD 1176/MT with a monthly inclination of 3.5% during September.
The overall market outlook of n-butylene and Iso butylene showed an upward trend in Q2 of 2022 across the North American region. Prices of USA Isobutylene have continued to increase instead of a hampered material supply. Demand fundamentals have been floating throughout the region as downstream Polyisobutylene, and Butyl Rubber industries attempt to maintain the balance. However, supply witnessed disturbing dynamics in the country on the back of high input costs that led producers to boost the price of materials for domestic and international converters. Furthermore, global inflation has caused n-butylene and isobutylene prices to rise. Furthermore, the United States imports a portion of its consumption from Asian and European producers. As a result, expensive imported cargoes bolstered the increasing price trend of n-butylene and Isobutylene in the US market. As a result, increased product cost partially surpasses customers' cost burden to protect their profit margins.
n-butylene and Isobutylene showed positive market sentiments in the Asia- Pacific region during Q2 of 2022. In addition, high raw material Tertiary Butyl Alcohol has the other facts for the price surge in the domestic market. Additionally, China's manufacturing activity expanded at its fastest rate, buoyed by a strong output rebound as pandemic restrictions were lifted, sending factories racing to meet recovering demand. Moreover, the subindex for production rose to its highest level since November 2020, while the first increase in export orders boosted new orders. After worsening for the past two years, supplier delivery times stabilized in June amid easing supply chain snags. Despite the strong rebound, factories remained cautious about hiring more workers, with employment falling. In addition, high inflationary pressure further supported the increased prices of the product. However, demand from the downstream for the fabrication of Butyl rubber and Polyisobutylene industries has remained steady.
During the second quarter of 2022, prices of n-butylene and Isobutylene have continued to rise in the European region, backed by the rising raw material cost, notably Tertiary Butyl Alcohol, and limited availability in the domestic market. Furthermore, the consequences of the ongoing energy crisis amidst the Russia-Ukraine war have further affected the product prices across the regional market. At the same time, the Producer Index (PI) was still hanging at a mounting level, forcing manufacturers' pockets. In addition, European energy prices have shot up coincided with the rising labour expenses, triggering concern among regional manufacturers. In addition, demand for Isobutylene in the fabrication of Butyl rubber and Polyisobutylene has remained stable to weak.
