Quarterly Update on Global n-Butylene and Isobutylene Market
For the Quarter Ending June 2021
As the industries effectively recovered from the impact of winter storm in Q2, supply conditions marginally improved however the regional market still witnessed limited availability of n-Butylene and Iso-Butylene. Efforts to replenish the inventories were strengthened ahead of the uncertainties of upcoming hurricane season. Demand has been exceptional from the downstream tire and plasticizers industries, whereas offtakes were consistent from the Automotive sector even though the automobile production was hindered amidst the semiconductor chipset shortage.
In Q2 2021, supplies of n-Butylene and Iso-Butadiene remained balanced as the production was ample to meet the downstream end use demand. Whereas the surged consumption of natural rubber reduced the consumption of Butadiene, and negatively impacting the n-Butylene and Isobutylene in the Asia Pacific market. Demand remained consistent from the downstream product industries and tire sector. Whereas in India due to the second COVID wave market activities were subdued in the second quarter, as a ripple effect the prices of n-butylene and iso-Butylene eased in the Indian market with Ex-Work Chennai prices drifting to USD 17817 per tonne in June.
During the second quarter of 2021, supply improved with increment in operating rates in several manufacturing facilities. Demand surged as most US buyers preferred European shipments over Northeast Asian cargoes due to better freight charges. Demand also improved following the improved offtakes from automotive sector. As a repercussion, the pricing trend in the European market remains marginally buoyed by the tight supply and high demand.
For the Quarter Ending March 2021
Supplies in the North American region were tight during the first quarter, due to the low inventory levels and shortages of the key feedstock as the industrial infrastructure collapsed in the USA Gulf region amid subzero temperature in mid-February. Several producing facilities were forced to shut down due to polar winter storm. Demand witnessed a downtrend as production activities were hampered throughout the North American region. Furthermore, enquiries of Isobutylene reduced from the butyl rubber market due to disrupted auto manufacturing. The supply-demand gap widened, consequently raising the prices of n-Butylene and Isobutylene for the March and April deliveries.
The Asian N-Butylene and Isobutylene market witnessed surge in supplies during Q1 2021, however demand was curtailed from the downstream rubber industries with increasing utilization of natural rubber which hampered offtakes of Isobutylene in China. Later in the quarter, some constraints were witnessed during the Chinese lunar New Year holidays as several plants in the northeast Asian region declared force majeures. Lesser demand pressured the prices of Isobutylene in the first quarter which higher shipping freight charges added on to trader’s worry. Isobutylene CFR prices in India were assessed at USD 18221 per tonne in March.
During the first quarter of 2021, supplies in the European region were tight, owing to low production rates at several plants in northwest Europe due to limited availability of the feedstock Ethylene and Isobutane. Trade from the Antwerp-Amsterdam-Rotterdam route was disrupted amid severe winter season which led to the transportation lag. Demand from the downstream sector surged due to better offtakes from the rubber industry to meet the orders from the recovering automotive sector.
For the Quarter Ending December 2020
During Q4 2020, Asian countries experienced significant recovery in industrial activities, that led to an appreciable rise in demand for petrochemicals like n-butylene and Isobutylene. This rise in demand ultimately led to an increase in prices of isobutylene from 17548.4 USD per tonne to 18198.7 USD per tonne from October to December 2020 in India. Meanwhile, price of n-butylene also rose due to significant demand for downstream products like LLDPE (Linear Low-Density Polyethylene) in Asia Pacific region. Owing to the bullish market outlook for feedstocks, prices of downstream LLDPE increased from USD 1157.6 to 1306.2 per tonne during Q4 2020.
During Q4 2020 in USA, prices of n-butylene increased following consistent increment in values of upstream crude oil. Besides, continuous increase in demand from downstream market led to increase in feedstock prices as well as the prices of their derivatives. In line, prices of LLDPE, a derivative of n-butylene surged from USD 950 to USD 980 USD per tonne from October to December in US. Another reason behind this rise in prices was hurricane zeta, which caused force majeure on several plants around US coast which led to a shortage in various petrochemical feedstocks.
European countries faced shortage of several upstream products including n-butylene and isobutylene during Q4 2020 on reduced imports from USA due to spate of hurricanes that caused force majeure on several plants. This shortage led to increase in prices of various feedstocks including n-butylene & isobutylene along with downstream products like LLDPE. Consequently, price of n-butylene’s derivative LLDPE, rose from USD 991.18 per tonne to USD 1039.5 per tonne from October to December.