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.
For The Quarter December Ending 2021
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.
For the Quarter Ending September 2021
In the North America region, n-Heptane prices traced an upward trajectory during the third quarter of 2021 supported by the sturdy demand from the downstream rubber and pharmaceutical industry. The arrival of hurricane Ida in the Gulf Coast of US hindered crude oil production, which resulted in the feeble supply of derivatives. The situation consequently pushed up the values of n-Heptane in the region. During the last month of the quarter, crude production improved, and the demand supply gap paved normalcy which finally dragged the prices of n-Heptane in both domestic and international market.
In Asia, n-Heptane market registered mixed sentiments during the third quarter of 2021 depending upon the demand pattern as well as the supplies of the product in the region. In India, under frequently changing market scenario, significant fluctuations in the n-Heptane values were observed. Demand for n-Heptane remained strong in the Indian market, while disturbed trade activities due to logistical issues and constrained availability of shipping containers kept on influencing the overall price trend of the product. In addition, volatility in upstream crude also supported the pricing trend of n-Heptane during this quarter. Prices of n-Heptane rose from USD 1738.47/MT to USD 1811.92/MT during July to August in India. However, a slight dip in the prices of n-Heptane was seen in September.
In Europe, n-Heptane prices observed an upward trend during the third quarter of 2021 followed by the lower production rates due to the energy crisis as well as the delayed imports. However, the demand from the downstream sectors including Pharmaceuticals and Rubber continued to be buoyant throughout the quarter. Further exorbitant freight charges and limited availability of shipping containers further sent ripples to the n-Heptane prices in the region.
For the Quarter Ending June 2021
The resumption in industrial activities in the US Gulf Coast improved the supply outlook during the second quarter of 2021. However, some hinderance was observed as the colonial pipeline was shut for a week due to the cyber-attack in the second quarter. Amidst the recovered supply chains and continuous industrial activities, the demand supply gap narrowed which provided a further ease in prices in the regional domestic markets. Demand remained firm as orders were piled up, along with the continuous demand from the rubber and pharmaceutical industries.
During the second quarter of 2021, market activities remained subdued in the Asia Pacific region due to unprecedented rise in Covid cases. The second Covid wave in India restricted the public movement thus lowering the offtakes from bulk buyers. As a repercussion of reduced market activities in India and the surged inventories level, prices of n-Heptane stabilized in the Indian market with discussions drifting to USD 1824 per tonne in June. In China, import of the brent crude oil surged, which proportionally improved the availability of n-Heptane in the Chinese domestic market. In China, offtakes remained consistent from the rubber industries and pharmaceutical sector.
The n-Heptane market in the European region showcased mixed sentiments during the second quarter. In the first half, supply remained constraint owing to the low production levels at several manufacturing facilities. Whereas condition improved in the second half, as the supply chain restored with better distribution practices of crude oil. Demand remained persistent from downstream rubber and pharmaceutical sector. As a ripple effect, prices in the European region remained stable to firm in the second quarter of 2021.
For the Quarter Ending March 2021
The North American region experienced the severe downfall in the crude oil inventories as the extreme freeze weather conditions in Texas and nearby of US Gulf coast area resulted in curtailed petrochemical production as several Naphtha crackers opted for force majeures in the region. Exxon Mobil shut its 369,024 bpd Beaumont refinery and 560,500 bpd Baytown refinery and several chemical plants in Texas along with its Louisiana, plants also facing operational issues. Reduced upstream run rates coupled with market tightness prompted ExxonMobil to increase the prices of n-Heptane by USD110/MT in March.
n-Heptane supplies were tight in the APAC region during Q1 2021, amidst major converters responding to the Saudi Aramco’s output cut in Crude Oil extraction by 1 Million barrels/day which proportionally surged the prices of crude barrels across in the Asian markets. Demand in the region surged as the buyers started to stockpile their inventories ahead of Chinese lunar new year holidays and uncertainty over import supplies. Due to sharp rise in upstream rates and shortage in market supplies, price of n-Heptane in the Indian market surged USD 1775/MT for April deliveries.
The supplies of n-Heptane in the region were constrained, owing to reduced imports from overseas throughout the quarter due to surging freights, higher shipment cost and Suez Canal blockage. Naphtha crackers in the region were heard operating at reduced capacity due to severe freeze weather conditions in the northwest Europe. Demand however surged due to consistent offtakes from the downstream solvent sector throughout the quarter.
Buoyed by increasing demand and maintenance turnarounds reported by some Chinese producers, n-Heptane offers were raised by a significant percentage in Q4. The price of n-Heptane was susceptible to huge fluctuations in the quarter due to volatile upstream dynamics. Resilient demand during the fourth quarter from the pharmaceutical industries raised the market sentiments. Price surge was driven by increasing cost pressure on the raw material front because of restricted and delayed overseas shipments. An uptrend was observed on the global level due to rising efforts for sustained economic and financial revival.
Alleviating demand for n-Heptane from the pharmaceutical intermediates and industrial solvents endorsed the product’s market outlook in Europe. Firming crude oil, however created a hazy picture in the European Union which was heard planning to increasing its crude oil imports to support the economy. In early November, the accessibility of Europe for n-Heptane improved as feedstock constraints in the upstream market had mostly been leveraged because of sustainable recovery policies along with supply chain. Several European countries were heard emerging from the crisis at varying rates as plant utilization rates gradually enhanced due to significant pick-up in demand.
Supply of n-Heptane eased after mid-October as producers increased production rates after plant outages caused by seasonal hurricanes. With most manufacturers eyeing on recovery in demand post the roll out of vaccine towards the year-end, operating rates were pushed higher by December. Recovery in upstream crude oil prices, however capped the producer’s margins. The growing demand for high purity material from the pharma industry, combined with an uptrend in paints and coatings manufacturing boosted the market sentiments.