The European Butanediol market faced a notable downturn in prices, driven by a combination of weakening downstream demand and increased production in late December. The market dynamics shifted with reduced consumption of key derivatives such as polyurethanes (PU) Resin and tetrahydrofuran (THF), which heavily influence Butanediol demand.

Downstream, the weakening demand for PU Resin—one of the most significant consumer for Butanediol—exerted downward pressure on overall Butanediol consumption. Similarly, demand for THF, another key derivative, further exacerbated the weak consumption trend. Demand for polytetramethylene ether glycol (PTMEG) and polybutylene terephthalate (PBT) was stable. But it could not offset losses from other derivatives. This added to a general market slowdown.

Another key factor influencing the decline in Butanediol prices was the falling cost of butadiene, its primary raw material. As butadiene prices dropped, production costs for Butanediol decreased correspondingly. This reduction in production costs facilitated lower selling prices, contributing to the overall decline in Butanediol prices in December.

The situation in European ports also played a role in the supply chain dynamics. Port congestion issues experienced in the final quarter of 2024 will be largely resolved by the end of the year. However, the holiday season's disruptions caused minor delays in vessel arrivals. Several facilities closed for Christmas and New Year. Port operations were expected to normalize by January 2025. But short-term disruptions affected some supply chains, worsening price declines.

In Q3 2024, the UK saw modest GDP growth of 0.2%, with the manufacturing sector growing by 0.5%. Despite this, the textile industry declined. It reduced demand for Butanediol derivatives. A slowdown in consumer spending and declining investments further dampened the economic environment.

In 2024, the EU textile sector faced challenges. In July, textile imports fell 4.5% year-on-year. This reflects weak demand for raw materials like Butanediol derivatives. Germany and Italy saw falling exports and factory orders. This reduced demand for Butanediol derivatives and slowed textile use across Europe.

As the year closed, Butanediol prices continued their decline, and this trend was expected to carry into January 2025. With supply levels high and the demand outlook remaining weak, discounts were anticipated to persist through the early part of the new year. The European market’s overhang of Butanediol, coupled with the challenges in downstream consumption, suggested a continued period of price reductions as market participants sought to adjust to the weaker economic conditions.

Looking ahead, the Butanediol market in Europe was expected to remain under pressure, with no immediate catalysts for significant price recovery in the short term. The focus would likely remain on supply adjustments and the resolution of demand weaknesses, which could potentially take several months to stabilize.