European Butanediol Market Likely to Forsee Bearish Trend Amidst Slow Demand

Germany- Butanediol price dynamics in the European market continued to follow the stagnant momentum as the consumers showcased less interest in placing higher orders despite the moderate production rate in the country. The European Central Bank extended its strategy to impose a plan for bringing down the burning inflation rate in the country. Main refinancing operations increased by 25 basis points to 4.0%, and the marginal lending facility along with the deposit facility, rose by 4.2% and 3.5%, respectively, in the European countries. As a ripple effect, Butanediol suppliers received fewer inquiries about the product amidst the oversupply of Butanediol with end-use manufacturing units. In the mid of June, Butanediol prices in the German market were witnessed at USD 2289 per MT, FD Wuppertal.

Another series of factors that equally contributed to the government the overall market dynamics of Butanediol included the cut-off in logistics demand and effective rates and final importing prices of Butanediol in the European market. Even though inflation eased the previous month to its lowest level this year, it remained well above the European Central Bank target of 2%, at 6.1%. Brent crude oil in the international market witnessed a hike the prices amidst moderate demand.

However, the derivates obtained from crude oil (Benzene), which is the upstream element of Butanediol, showcased a weaker demand outlook and price dynamics proportionally impacting the production cost of Butanediol in the major exporting market (Asia-Pacific). As a result, the European suppliers received softer prices for the product in the European market as the industrial operational rate in the European market resumed. When rising gas prices and concerns about energy security stifled production, the chemicals sector saw a larger decline than the previous year, but the rate of contraction slowed significantly across key producing regions.

Representatives from the alliance parties in power say that after the government reached an agreement recently, a law that will make it easier for skilled workers, especially those from outside the European Union, to immigrate is expected to be passed this week. The government will continue increasing vacancies and hiring laborers based on the required skills, creating better opportunities for domestic and international laborers. The government also claimed the long-awaited reforms would modernize Germany's immigration policies. As per ChemAnalyst, Butanediol prices in the European market are expected to follow the slow price momentum on account of slower demand and ample stockpile availability with the downstream (paints, coating, and PTMEG) market.