For the Quarter Ending March 2023
In the first quarter of 2023, the n-Heptane market in the USA was in a bearish state due to weak demand and high supply, which caused prices to decrease. The reduced trading activity was a result of abundant supply and lower offers for non-premium spot cargoes. Suppliers were compelled only to buy what was necessary due to the drop in spot trading. The market fundamentals were weak, resulting in no firm bids or offers during this period. The demand for n-Heptane from the downstream solvent market decreased due to sluggish market offtakes and limited trading activities. The US market was characterized by uncertainty, which adversely impacted the trading dynamics.
The price of n-Heptane has decreased throughout the first quarter of 2023 due to slow demand and ample supply. As of March 2023, n-Heptane was being traded at USD 1508 per MT on a FOB Qingdao basis due to the absence of significant changes in the relevant factors impacting the final prices. However, the demand from downstream industries such as plastics, textiles, and electronics is expected to increase soon, which could impact the price. The upstream companies are predicted to increase their production rates in response to the demand. The price of n-Heptane further decreased in February 2023 due to lower crude oil prices and reduced demand from the plastics and electronics sectors.
Throughout the first quarter of 2023, the cost of n-Heptane in Europe remained stable. This was due to steady demand from downstream companies without any major interruptions in supplies. The supply-to-demand ratio remained consistent, resulting in only a slight price increase in January. The market was characterized by moderate demand and limited supply, leading to a bearish situation. Despite recent price reductions, the product demand remained on the negative side from the downstream industries like textiles and electronic industries due to the global economic slowdown. Purchasing activity in the European market was relatively stable during the first quarter, with no significant changes.
For the Quarter Ending December 2022
In this quarter, the n-Heptane markets in North America and Asia were identical. The increased demand for the product from producers of electronics, plastics, and textiles was the primary factor that contributed to the price increase in the United States. There was enough of this product in the first half of this quarter to meet the increased demand. However, despite a decrease in demand in December, the price of this product increased due to a limited supply in warehouses and inventories as production activities slowed down in upstream companies
In this quarter, n-Heptane prices increased in the Asia-Pacific region. The primary factors that contributed to the price increase in China were the increased demand for the product. In the first half of this quarter, there was enough of this commodity to meet the increased demand from producers of electronics, plastics, and textiles. However, the impact of Covid- 19 curbs on upstream production resulted in a limited supply of this product in warehouses and inventories despite a decrease in demand in December. In terms of India, there was much demand for this product in the first two months. However, it began coming down in the third week of December, which let more volumes of this commodity remain in inventories and warehouses without being sold, making suppliers and sellers decrease their quotes to clear off the piled-up stocks.
The market for n-Heptane was the same across Europe this quarter. In the first two months, this commodity's price continued to fall in the Netherlands due to moderate demand from businesses downstream that had reduced production due to rising energy costs because of the ongoing conflict between Russia and Ukraine. Upstream businesses were also maintaining average production rates for the same reason. However, despite the fact that there was moderate demand for this product in December, there was a shortage in the market because upstream productions remained modest, which allowed the price to rise. The German market for n-Hexane moved in the same direction as the Dutch market.
For the Quarter Ending September 2022
The events that took place in the crude oil markets of Europe and Asia influenced the markets for this product in North America. This quarter, n-Heptane's prices in the United States decreased. Due to a force majeure situation and lack of labor due to summer vacations, the supply of n-Heptane was restricted, which resulted in an average demand for this product from downstream businesses. As a result, textile companies used cyclohexane in their production processes rather than making use of this product.
This quarter, the entire Asia-Pacific region saw a decline in the n-Hexane market, but it got bounced back. When it comes to China, there are several reasons why the price of n-Heptane has decreased. The primary reason for price reduction in the early days of this quarter was the recession in the Asian crude oil markets, which resulted in a drop in upstream crude oil prices, as well as the provincial governments' enforcement of lockdowns. In addition to these, because of severe power shortages, n-Heptane-using industries and companies in the electronics and textile domain had to halt completely or significantly reduce their production rates. However, the prices started expanding from September 1st week due to the enhanced demand for this product for downstream processing. Consequently, on a FOB-Qingdao basis, n-Heptane closed its market in China this quarter at USD 1,650 per MT. In this quarter, the market for n-Heptane in India was identical to China's. This product's prices were influenced by the moderate demand for n-Heptane from businesses downstream and the lower prices of crude oil and started rising in September because of enhanced demand for this product by textile companies to meet the festive demands for their end-products.
The market of n-Heptane in Europe was identical to that of the Asian countries this quarter. The ongoing war between Russia and Ukraine tightened the supply of natural gas and crude oil, which significantly increased production and energy costs. As a result, downstream businesses were extremely concerned, and they showed only a passing interest in this product. The n-Heptane market in Germany and the Netherlands followed similar trends. The same factors that contributed to the decrease in this product's cost in the Netherlands during this quarter were also responsible for the price drop in Germany.
For the Quarter Ending June 2022
The prices of n-Heptane were stable in the North American market during the second quarter of 2022 and started falling by the end of June. Stable demand from downstream cement, inks, and other solvents pushed the market prices downwards. The prices of International Crude Oil fell globally in April and the end of June, affecting the market sentiments. Oil prices continued to be under pressure as supply expectations in the market due to the Russia-Ukraine conflict eased slightly. Varying freight charges also affected the prices and shipment rates. Ample product availability was seen in the market with the traders as the product consumption decreased.
The prices of n-Heptane fell in the Asian market during the second quarter of 2022 with a quarterly declination of 3.2% in China, as recorded by Chem Analyst pricing team data. Fluctuations in the global freight charges due to the ongoing war between Russia and Ukraine supported the downward trend of the product in the regional market with the traders. Falling demand from downstream cement, solvents, and inks enterprises affected the market sentiments. Decreasing freight charges in the Asian market during the second quarter impacted the prices drastically, relieving cost pressure from the prices. The inventories were increasing with the suppliers, and the product consumption rate was hurt.
n-Heptane prices were stable in the European Union regions during the second quarter of 2022, with the fluctuations in the global petrochemicals market due to the ongoing war between Russia and Ukraine supporting the prices of Crude Petroleum. The freight charges and downstream demand were observed to be steady, affecting the market sentiments. The Russian war directly impacted the product trade, which impacted the regional market's consumption, buying, and selling. The processing costs of n-Heptane were optimal, and production of the products was more, causing ample availability of the products in the market.
For the Quarter Ending March 2022
The n-Heptane market remained firm throughout the first quarter of 2022 under the cost pressure from skyrocketing upstream Crude oil value and strong demand from downstream solvents and other industries. Regional market dynamics remained tighter as the global demand for crude oil overpowered the available supply. Additionally, the East European conflict further worsened the demand-supply fundamentals of crude oil. During the quarter, Chevron Phillips reported normalcy in production with little to no production disruptions. The company also stated that while the steady rise in crude oil may not have any short-term consequences, the mid-to-long-term consequences might be disastrous, with worldwide ramifications. Thus, n-Heptane prices were assessed at USD 2518/MT during March.
Soaring upstream Crude oil value has been putting pressure on the global market, where downstream derivative players have started feeling the heat. n-Heptane prices has been escalating for the past few months across the Asian market on the back of stable offtakes from the downstream solvent sector coupled with rising input raw material costs. Furthermore, the rising infection rate of the new Omicron variant in China has become a concern to the regional players. Regardless of its less lethal effect, China's zero-tolerance and zero-covid policy has disturbed the overall economic growth of the regional market. Thus, post witnessing a consistent hike, n-Heptane (99%) price hovered around USD 1916/MT on a FOB basis in China and USD 2434/MT Ex-Mumbai, India, towards the end of the first quarter.
In the first quarter of 2022, n-Heptane prices remained firm due to intense cost pressure and robust demand from downstream solvent players. Upstream Crude oil started the year on a solid note, however, Russia's invasion of Ukraine exacerbated market dynamics, and crude oil went haywire where the prices were assessed at more than USD 130 per barrel. Consequently, downstream derivatives, including n-Heptane, came under pressure. Imports become strained as the relationship between the West and Russia got to its lowest point in decades. With limited availability and increased inflationary pressure, production costs increased substantially. Hence, in Q1, n-Heptane prices were assessed at USD 2805 per MT in Europe.
In North America, the price trend of n-heptane marked stability during October and November. Pricing dynamics of upstream crude oil during these months was showcasing uptrend in October and marginally eased in November. While showcased significant ease in December, providing ease to downstream heptane in the domestic market. Meanwhile, downstream paints and coatings sector remained comparatively dull than other segment throughout the quarter, which also remained a major factor behind overall lower offtakes for the product across regional market. Thus, overall market of n-heptane was observed low in the ending December of quarter 4 of 2021.
In Asia, during the fourth quarter of 2021, n-heptane prices rose consistently, which was assessed around USD 2025/MT in India during October. Rising crude oil value remained a prime factor that pushed up the prices of n-heptane during Quarter 4 across regional market. However, the market of crude oil in China was observed fluctuating in the meantime and increased by the end of December, which resulted into overall stability in the price of n-heptane. Furthermore, demand for the product from the downstream solvent market remained firm, while traders noted ample offtakes from niche buyers.
The overall outlook showed that the price of n-heptane witnessed firmness during the Q4 2021 across European market. However, due to high natural gas prices amidst rising upstream crude oil values, input cost rose exponentially for several commodities including n-heptane. As the consumption increased in October and November so the prices increased for the product, while improved upstream crude oil availability in Europe market provided some ease to prices in December and the market of paints and coatings was stable throughout the quarter.