For the Quarter Ending December 2022
North America
Raffinate prices have witnessed mixed sentiments in the US market throughout the fourth quarter of 2022. During the first month of Q4, Raffinate prices increased due to high inflation and volatile energy prices. Limited product availability and stability to firm demand from the downstream MTBE industries lead to price increases in the domestic market. Although, during the last two months of Q4, both domestically produced and imported Raffinate prices have been on the weaker side. The continuing price drop has been attributed to muted demand dynamics from downstream C4 derivatives, MTBE, and other competitive industries, while material availability has remained strong amid firm imports on the USA ports. As per the data, Purchasing Manufacturing Index (PMI) fell from 56.5 to 49.6 in December 2022, implying a contraction in industrial and production activity.
Asia- Pacific
Raffinate prices decreased in the Chinese market during the fourth quarter of 2022, backed by bearish demand from the end-user Methyl Tert-Butyl Ether (MTBE) and allied industries, while sufficient material availability forces manufacturers to revise negative price quotations. Meanwhile, consumption of Raffinate from the overseas market has also remained on the weak side amid soft buying sentiments. In addition, feedstock Naphtha prices have also been dropping, easing the overall domestic production cost. Furthermore, the congestion has eased at key ports, and overall vessel utilization was low due to a slowdown in new orders. According to the National Bureau for Statistics (NBS), manufacturing activity contracted, and Purchasing Manufacturing Index (PMI) plummeted from 48 to 47 in December.
Europe
Raffinate prices fluctuated in the European market during the fourth quarter of 2022. During the initial Q4, Raffinate prices dropped owing to weak demand dynamics, resulting in sluggish offtakes from the downstream industries, including the MTBE industry. However, during mid of Q4, the Raffinate price rebounded due to high-cost pressure from the feedstock Naphtha. However, the threat of recession across Europe has dampened the demand from the downstream industries. Furthermore, during the final month of Q4, Raffinate prices plunged due to a decline in feedstock Naphtha prices. Additionally, a sharp drop in the freight cost, resulting in cheap imported material availability and a continual fall in upstream crude oil prices, supported the weakened pricing dynamics. Meanwhile, energy prices have stabilized, resulting in soft production costs in the regional market.
For the Quarter Ending September 2022
North America
Prices of Raffinate have shown mixed sentiments in the USA market during the third quarter of 2022. During July, Raffinate prices have increased by more than 7.5%, supported by high feedstock prices, turmoil in the energy prices, and a mounting inflation rate. Meanwhile, demand from the downstream derivative industries has remained stable for the firm. However, during August, Raffinate prices dropped by 2.1% owing to the weak demand dynamics and fall in the feedstock Crude oil and Naphtha prices. The demand from downstream Methyl Ethyl Ketone and allied industries remained mostly stable amid ample inventory levels, resulting in weakened pricing dynamics. Meanwhile, the consumption rates in the US dropped, owing to the threat of a recession looming over the USA during the third quarter. Although in September, Raffinate prices rose due to the active inquiries from the downstream industries. Hence, as a result, the price of Raffinate DDP Texas was assessed at USD 734/MT in September 2022.
Asia- Pacific
Raffinate prices have dropped consistently in the China domestic market during the third quarter of 2022. Demand dynamics remained under pressure owing to frequent lockdowns in the region due to the Covid pandemic. The performance of the downstream Methyl Ethyl Ketone and other industries has been underwhelming, and the volume of offtakes remained muted. Sufficient inventory level available to cater to the domestic demand. At the same time, demand from the overseas market has been lackluster amid a slowdown in global economic activity. Meanwhile, the supply chain in Northeast Asia and South Asia remained under stress as typhoons caused halts in port activities, mainly in China, Japan, and South Korea. As a result, prices of Raffinate FOB Qingdao were assessed at USD 900/MT during September.
Europe
Prices of Raffinate have gained downward momentum in the European market during the third quarter of 2022. Since the beginning of Russia-Ukraine, the European countries have faced strong headwinds due to the crisis in natural gas supply and high prices of the available material. The limited natural gas supply has imposed downside risks on the manufacturing capacities of the downstream sectors. The domestic cost of production continues to remain high due to elevated energy and operating costs, resulting in weak output rates. However, the steady flow of cheaper imports from the Asian and North American regions has caused the Raffinate prices to decrease in the regional market. Furthermore, fluctuation in the upstream Crude oil and Naphtha has affected the pricing dynamic of Raffinate. On the other side, demand from the downstream Methyl Ethyl Ketone and allied industries has dropped amid high inflation. Hence, as a result, prices of Raffinate in Germany plunged by around 3-4% during September 2022.
For the Quarter Ending June 2022
North America
During the second quarter of 2022, Raffinate prices have been consistently rising in the North American region due to the firm production cost and stable consumption levels from downstream industries. The petrochemical market has shown early signs of decline in the US region; however, similar changes in the market are yet to take place in the downstream commodities. In addition, C4 demand has eased in the last few weeks; however, strong energy prices and logistics constraints have continued pushing the prices of Raffinate across the regional market. Meanwhile, demand dynamics from downstream Methyl Tertiary Butyl Ether industry and Di isobutylene industry have continued to improve. The gasoline and Petroleum industry has been buoyant in the US market in the last quarter, and the output rates have been fostering; though, growing fears of a US recession may slow down the optimistic market sentiment.
Asia- Pacific
The Raffinate market witnessed an oscillating trend in the Asia- Pacific region in the second quarter of June 2022. Initially, the prices of Raffinate have increased in the Chinese market because of the limited availability and high demand from the downstream industries. On the raw material front, mounting upstream crude oil values amidst Geopolitical tension between Russia and Ukraine have negatively affected the raw material Naphtha cost. However, towards the end of the quarter, Raffinate prices dropped by 5.8% and 2.1% in May and June, respectively. In addition, the demand has plunged owing to the market shutdown caused by the rising Covid cases, which led to the oil price cut by Saudi Aramco in May, pulling down the Raffinate pricing across the domestic market.
Europe
During the second quarter of 2022, the prices of Raffinate have witnessed an upward trajectory in the German market on the back of the limited availability coupled with the supply shortage. In addition, the escalating upstream Crude values have affected the raw material Naphtha cost, which pushed the Raffinate prices to follow an uptrend in the domestic market. Additionally, due to the Russia-Ukraine war, the EU government imposed sanctions on Russian oil imports, which led to the limited availability of Crude oil across the domestic market. Moreover, the demand from the downstream derivative Methyl Tertiary Butyl Ether and Di-isobutylene manufacturers has continued to surge, further inflating the Raffinate market. Moreover, the domestic market's healthy buying activities and limited supply provoked the suppliers to revise their other offers.
For the Quarter Ending March 2022
North America
Raffinate demonstrated strong market sentiments in the United States during Q1 2022, in contrast to the last quarter of 2021. Raffinate's price trend exhibited an increasing trend, owing to the product's limited availability in the region. During the Russia-Ukraine invasion, upstream crude oil and naphtha prices rose, and prices climbed as the market appeared to be rebounding with greater demand. The high price of Raffinate in the region has been under pressure due to a supply scarcity and increased demand from Methyl Tertiary Butyl Ether. Furthermore, during the war, the United States banned the import of Russian oil, exacerbating the shortage. In March 2022, Raffinate DDP Texas pricing were reported at USD600/MT.
Asia-Pacific
Due to rising demand for Raffinate R1 and R2 from Butadiene and other derivatives, Raffinate prices rose in the Asia-Pacific region during the first quarter of 2022. Firming upstream Crude oil and Naphtha prices, as well as a supply scarcity in the region due to the Russia-Ukraine conflict, had a big impact on production rates and costs. Furthermore, supply chains were interrupted by high freight charges as a result of the container scarcity, resulting in a supply shortfall in the region. Raffinate demand remained robust throughout the first quarter. In March 2022, the price of Raffinate 2 Ex -Vadodara was estimated to be USD569/MT.
Europe
Raffinate prices have been steadily rising throughout Europe from the start of the first quarter of 2022. The increase was attributable to increasing downstream use in the manufacture of Methyl tertiary butyl Ether across the region, as well as high demand from the Ethylene and Propylene industries. Furthermore, the impact of upstream crude oil and naphtha prices on pricing during the Russian-Ukraine conflict was significant. The energy crisis and upstream crude oil prices were exacerbated by the rise in naphtha prices. Furthermore, Germany's prohibition on Russian gas imports has not only raised crude oil prices, but it has also delayed local Raffinate production, as several petrochemical refineries in Europe have halted output owing to the energy crisis. Prices in Germany were reported to be USD 700/MT FD Hamburg in March 2022.
For the Quarter Ending December 2021
North America
In Q4, with increase in prices of crude oil and Naphtha the prices of Raffinate increases compared with Q2 and Q3. Supply from the USGC to NWE additionally declined in October as US market members hold locally more naphtha streams with the absolute remaining at 154,000 MT for the month. In October the prices were mixed with the range of $584/ton DDP Texas-$615/ton DDP Texas. However, towards the second half, the prices slipped as the Omicron scare had affected the production units due to which the market of US suffered and towards the last week of December, the prices of Raffinate slipped to $548/ton DDP Texas.
Asia Pacific
The prices of Raffinate in Asia fell drastically this quarter with declining crude oil prices in the November and December. In October, the prices were on its peak with $782/ton Ex-Vadodara. Raffinate values in the regional market continued to firm taking cues from supply disruption across the globe. Besides, consistent upward crawl in upstream crude values also contributed to push up raffinate prices in the since past 2 months. However, in December the prices fell and were observed to be $512/ton Ex-Vadodara. The Indian market fell as the traders had not shown much interest for the trading of Raffinate and the downstream MTBE market was tepid. Asian MTBE market however remain moderate amid seasonal year end and fear of Omicron variant.
Europe
In Q4, the prices of Raffinate skyrocketed this quarter and the demand was seen robust. In December, the prices were surged to $860/ton CIF Hamburg. European naphtha is set to see snugness in December, recording multi-year highs in the physical and paper markets while absence of arbitrage revenue to Asia has prompted a spike in Mediterranean to NWE streams and related freight rates. The persistence tightness in the prices of downstream MTBE market was seen but the prices slightly deflect downward towards the end with the approaching new year festive which slowed down the market.
For the Quarter Ending September 2021
North America
The price trend of Raffinate witnessed an upward trajectory in the North American region during the third quarter of 2021. The increase in prices of upstream crude oil has largely impacted the prices of Raffinate in the US. Surging demand from the downstream tert-butyl alcohol industry has constantly put an increased pressure on the price of raffinate throughout the quarter. Sufficient availability of upstream Naphtha increased Raffinate supplies across the region.
Asia Pacific
The prices of Raffinate demonstrated an upward momentum in the Asia Pacific region during Q3 2021. In India, domestic C4 Raffinate observed a slight uptrend influenced by firming crude oil along with additional gains across the upstream sectors. Raffinate 2 Ex-Vadodara (India) prices escalated from USD 697/MT to USD 769/MT in the third quarter. Traders observed strong gains in C4-value chains, driven by strengthening Ethylene margins. A trader remarked that domestic market prices are reflecting positive sentiments around Butadiene and other derivatives, maintaining a relatively close correlation with the crude oil markets and pent-up demand in Q4.
Europe
The market outlook of Raffinate strengthened across the European region in the third quarter of 2021. Rising energy cost, firming crude oil values, and increasing demand for isobutylene continued to push up the raffinate cost during Q3. An increment in supplies was observed across the region backed by the bullish demand from the downstream sectors. Increasing industrial activities during the quarter further propelled the demand for Raffinate in the region. Consistent inquiries from the downstream processors were noted and traders actively stocked up inventories to reserve margins in Q3 2021.
For the Quarter Ending June 2021
North America
During the second quarter of 2021, Raffinate supplies in the North American region surged owing to the ample availability of the upstream Naphtha. The industrial infrastructure in the US Gulf Coast recovered from the impact of February winter storm pushing up the operational rates at the Naphtha crackers. However, few crackers struggled to achieve the optimum efficiency and operated at lower rates. Even though the production of automobiles reduced amid the global shortage of semiconductors the offtakes were surged from the downstream refiners throughout the second quarter. Enquiries of C-4 Raffinate from the Butadiene producers bolstered throughout the North American region. Raffinate prices in the region remained firm in the second quarter due to firming upstream crude oil.
Asia Pacific
Raffinate supplies in the Asia Pacific region were tight in the second quarter of 2021, owing to the turnarounds at some facilities based in South Korea. Several crackers in China ended their maintenance turnaround and sentiments rose after the news that Philippines JG summit will start its new 110 KTPA Raffinate facility in July after observing COVID related delays. Sinopec announced start up of its two new STRATCO alkylation units in China which would process MTBE raffinate as feedstock to generate low-sulfur and high-octane alkylate with zero olefins. The move will enable Sinopec to meet the criteria of China’s VI standard at two refineries. Demand from the downstream industries was high to cope with the enquiries in the Butadiene industries, whereas in India, the market outlook remained healthy despite the COVID related restrictions. Pricing trend in India observed an uptrend throughout Q2 with the prices of Raffinate-1 assessed at USD 821 per tonne in June.
Europe
In the European region, Raffinate supplies were eased with the influx of the American cargoes during the second quarter of 2021. The Raffinate market supplies were further supported as several major producers in the Middle East resumed production after a turnaround. Market participants saw potential strength in the downstream markets with the pickup in industrial activities. The demand bolstered throughout the quarter due to frequent enquiries from the downstream processors and traders actively stocked up inventories to reserve margins.
For the Quarter Ending March 2021
North America
During the first quarter of 2021, Raffinate supplies were sluggish due to slow output in the US, on account of unprecedented extreme weather condition in the US gulf region, which resulted in several petrochemical plant outages. The supply tightness translated sharp increases in the prices of Raffinate. However, production is anticipated to remain tight as the spot offtakes from the buyers inclined due to low inventory levels, and companies focusing on reducing the debt, followed by surged demand from the downstream sectors towards the end of the quarter.
Asia-Pacific (APAC)
Raffinate supplies improved during the Q1 2021, due to improved production levels, owing to the addition of new capacities in China, followed by several players such as LG Chem and YNCC restarting their productions after a turnaround period. JG Summit in Philippines delayed the commissioning of 110,000 ton/year Raffinate-1 unit until April. Pakistan's Byco Petroleum revealed it plans to construct 27,300 b/d aromatics plant to produce benzene, mixed xylene, p-xylene, o-xylene, C9 and raffinate. Due to firming upstream rates, the prices of C4 Raffinate-2 in India surged by +USD 66.61/ton registering quarterly average of USD 688/ton in Q1.
Europe
The supplies were tight in the European region during Q1-2021, as imports from the US declined amid the unprecedented freeze weather, followed by the surged crude oil prices which proportionally hiked the prices of raffinate in European domestic market. Whereas the demand remained slowed from the downstream sector as the offtakes dwindled from the downstream Methyl Tert-Butyl Ether and Butadiene Industries as economies entered fresh lockdown restrictions due to resurgence in COVID cases.
For the Quarter Ending December 2020
North America
The supplies remained tight during the first half of fourth quarter 2020 as a ripple affect of the aftermath of five hurricanes experienced in the previous quarter. Curtailed crude throughput capped Raffinate supplies in the US gulf region resulting in potential shortage of Raffinate and its other derivatives. However, during the second half of the final quarter, situation improved as the several plants restarted the production to meet the increasing demand. Improved demand followed by the limited production caused the surge in the price in the regional market.
Asia
Raffinate demand surged across Asia amid ramp up of the market activities which bolstered the demand for downstream derivatives such as MTBE, MEK etc. followed by the refineries in the region operating at their maximum efficiencies. JG Summit Petrochemicals in Philippines announced the start-up of new aromatics and butadiene extraction unit in the upcoming quarter, with the production capacity of 110,000 tonnes/year of Raffinate-1. High demand and hampered imports due to port related congestion pushed the prices of Raffinate-1 and 2 in regional market. In December, price of C4 Raffinate-1 was assessed at USD 462/ton while for Raffinate-2 was assessed at USD 640/tonne in India.
Europe
Raffinate demand was reduced amid the resurgence of fresh wave of COVID-19 infections, resulting in reduced consumption for downstream MTBE production during the winter season. The demand of Raffinate, somehow remained balanced, due to increased consumption and high offered prices from the Asian and North American regions. Shortage in overseas containers and high ocean freight resulted in multi-fold increment in the prices of Raffinate. Despite waning MTBE demand, producers remained hopeful amid economic revival post the roll out of COVID-19 vaccine in Q1 2021.
