Quarterly Update on Global n-Propanol Market
For the Quarter Ending June 2021
During the second quarter, the North American region observed an exceptional demand for n-Propanol buoyed by seasonal pickup in demand from the paints and coating industries. Producers ramped up run rates to fulfil the n-Propanol enquiries which were piled up due to tightened market scenario since Q1. The supply demand imbalance resulted in surge in regional n-Propanol offers during Q2. Sasol announced positive price correction in n-Propanol rates by USD 567 per tonne effective from 1st June. Supply outlook in the North American market improved by June as the industrial activities in the Gulf coast restored from the devastating impact from the winter storm Uri. Although due to the uncertainty of the upcoming hurricane season, the buyers were booking for large orders to replenish the inventories levels. N-Propanol CFR Texas price was assessed at USD 2310 per tonne in June.
Amidst severe pandemic-related uncertainties with the arrival of deadly second COVID wave in India, the industrial activities were slackening in operations amidst the restricted commercial activities. Several downstream buyers were planning out to manage their inventory levels. In China, the n-Propanol market remained weak throughout the quarter taking cues from the cheaper feedstock and narrowed market spread, although the overall market outlook of n-Propanol stabilized in June. The pricing trend in India observed a major slump in the second quarter with Ex-Works Mumbai (India) discussion assessed at USD 1355 per tonne in June, reporting a downtrend of 16.42% from the prices in the previous quarter.
n-Propanol supplies in the European region improved compared to the previous quarter, as Oxea chemicals ended its prolonged turnaround in the second quarter, along with improvement in imported volumes from the USA. Demand surged phenomenally from the downstream paints and coating industries as the region witnessed seasonal inquiries from the construction sector throughout the quarter, although offtakes were consistent from the pharmaceutical and automotive sector. As a ripple effect, the n-Propanol prices remained firm on the back of strong demand in the second quarter.
For the Quarter Ending March 2021
Extreme freeze weather conditions in the USA Gulf region negatively impacted n-Propanol supplies during the first quarter of 2021. Due to limited feedstock availability and adverse effects of the winter storm, a major production facility of capacity 250,000 MT/year of n-Propanol was temporarily shut down during mid-February. Exports to other countries were hampered due to disrupted trade in the region. Demand however surged amidst tight supplies as the offtakes from the solvents sector increased in the first quarter. OQ Chemical surged the prices of n-Propanol by +USD 120/MT in the first half of the quarter.
n-Propanol supplies in the Asia Pacific region were balanced-to-tight during the Q1 2021. Prices showed an astonishing spike in March buoyed due to sudden decline in imports from the US. The freezing snap in the US has affected n-Propanol production as well as export potential considerably and has laid a direct impact upon the supplies of several Asian and European countries. Due to improved consumptions from the paints and coatings, and Antifreeze sector the n-propanol supplies witnessed an upsurge in Q1. The significant hike on the prices of Crude oil proportionally impacted the prices of n-Propanol in the APAC region.
The European n-Propanol market was severely impacted by the supply shortages throughout the quarter in 2021, as the refineries operating rates were affected in the northwest region amid the cold weather, followed by the reduced imports from the USA. OMV announced to build a 1.25 million liters/year facility to produce n-Propanol in Schwechat Facility. Demand from the downstream sectors was ample as offtakes from paints and coatings sector improved.
For the Quarter Ending December 2020
n-Propanol supply across Asia was observed getting firmer by the end of the Q4 with the prices gradually decreasing due to strong supply. Spot prices of n-propanol were observed to be hovering around USD 1520 per tonne FOB China. The downstream demand from the solvent industries tumbled, thus pressuring the rates of n-Propanol in the regional market. In India, demand outlook remained stable with prices witnessing a fall by USD 108/tonne between October to December, while maintaining an average of USD 1575/tonne during the quarter.
The demand for n-Propanol remained stable in the first half of the fourth quarter which subsided later due to fall in demand. However, some producers sought for increase in prices as it was being largely used as a substitute for IPA. Towards the end of the year, fresh lockdowns imposed due to new wave of infections disrupted the demand for the downstream products. The surge in crude oil however, supported the price curve by a significant percentage.
Due to strong demand of the n-Propanol and inclining prices of upstream products, leading US producers escalated the prices for n-Propanol during Q4 2020. A prominent factor which affected the supply of n-Propanol in the North American region, was power and production outages due to weather related challenges in the US. By the end of the fourth quarter, some propanol dealers made upward adjustments to pass on the price increases of upstream crude oil to its end consumers, which had a little impact on the overall market trend.