For the Quarter Ending June 2021
As the Industrial Infrastructure in the US Gulf region recovered from the devastating impact from the winter storm, resumption in operations of refineries and crackers gradually eased the availability of Propylene Oxide which further improved the production of Tertiary-Butyl Alcohol in the North American region. Demand surged from the downstream solvent and paint remover industries, amidst the seasonal hike from the building and construction sector. As a ripple effect, the prices in the North American region remained buoyed taking cost support from the hiked prices of upstream Propylene Oxide.
Supply of Tertiary Butyl Alcohol in the Asia Pacific region remained sufficient to cater the end use segments demand, but regional scenario differ throughout the region. In China, due to surged inflation rates, the prices of upstream Propylene remained buoyed throughout the quarter, which further strengthened the wait and see approach among the buyers. In India, the market fundamentals remained subdued due to the impact of second COVID wave, however situation improved in the later half as the government eased the restrictions in several regions. Prices of Tertiary Butyl Alcohol for Ex-Work Mumbai observed an uptrend and discussion settled at USD 1327 per tonne. Demand flourished from the gasoline blending and construction sector.
The supply of Tertiary Butyl Alcohol in the European region remained tight as the turnaround in several PDH, refineries and crackers of upstream Propylene limited the availability of key feedstock Propylene Oxide in the second quarter of 2021. However, some constraints were eased as the shipments from the North American region improved after observing almost negligible quantity of Tertiary Butyl Alcohol.
For the Quarter Ending March 2021
During the Q1 2021, the supplies in North American region were tight, as several plants were forced to shut down due to the sub-zero temperature in the USA Gulf region. Nearly 100% USA TBA capacity went offline due to the power outages and ruptured pipelines. However, the enquiries increased from the downstream MTBE sector despite of the shortage of Tertiary Butyl Alcohol in the region which caused the significant hike on the prices of TBA in the first quarter.
The supplies in the Asia Pacific region improved during the first quarter of 2021, as the turnarounds in several major plants in the northeast Asian region ended in the first half of the quarter. Several plants outages in Middle East and USA added some constraints in the regional supplies, as the imports declined. A joint venture between LyondellBasell with Sinopec commenced a new PO facility of capacity 275,000 MT/Year in China, since TBA is produced as a byproduct in the process, it indirectly supported TBA production capacity.
The European Tertiary Butyl Alcohol (TBA) market remained tight, during the first quarter of 2021, owing to the shortage of key feedstocks due to the low production rate of plants in Northwest European region, followed by the decline in imports from the USA. However, demand and supply gap remained balanced due to the fall in the enquiries from the downstream MTBE industries and limited commercial and industrial activities due to the resurgence of COVID.
During Q4 2020, the prices of TBA rose appreciably, extending strong gains from the feedstock Propylene and Propylene Oxide (PO) whose offers showed marked rise due to rapid increase in demand for several downstream derivatives. Amid strong optimism due to vaccine roll-out and rebounding of several Asian economies, refiners were heard operating their units at optimum levels during the fourth quarter. Surging crude oil and PO led to rise in the TBA production costs. TBA offers across the Indian markets were raised from 1087 USD/tonne in October to 1127.7 USD/tonne in December 2020.
Price of TBA rose significantly during the fourth quarter buoyed by firming upstream rates. This rise was triggered by the surge in both chemical-grade propylene (CGP) and polymer-grade propylene (PGP) starting late November. Amid high demand from the downstream sectors, hurricane zeta created unplanned turnaround on several production units across the gulf region during November 2020. These factors prompted increment in the tertiary butanol offers towards the second half of Q4. In October, Lyondellbasell announced almost 30% increase in its TBA/PO project cost due to construction delays caused by the pandemic and unexpected tariffs. The proposed plant, which is under construction since August 2018, would be capable of producing around 1 million tpy TBA and 1 million tpy PO. The delay eventually seems to hurt the regional TBA market.
Europe faced hinderance in imports of the key raw materials from the US during Q4 2020. The domestic supplies of raw materials were also not up to the mark due to a new wave of infections affecting the market movement. TBA prices were uplifted across the region due to a significant rise in demand from the domestic market but lack of sufficient supply. In addition, due to shortage of the feedstock Propylene, TBA prices increased by double digits within Q4 2020. TBA being a key raw material for the production of organic peroxides and other specialty chemicals is witnessing high demand growth in the region.