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Global Isopentane Prices Surge in May on Strong Demand and Upstream Volatility
Global Isopentane Prices Surge in May on Strong Demand and Upstream Volatility

Global Isopentane Prices Surge in May on Strong Demand and Upstream Volatility

  • 29-May-2024 3:55 PM
  • Journalist: S. Jayavikraman

Global Isopentane prices continued their upward trend from the previous month, rising in May 2024 across major markets, including the US, Europe, and Asia-Pacific.

In the first half of May, Isopentane prices in the US market rose by around 1.4%, continuing the upward trend from the previous month, where prices increased by about 2%. This price increase in April 2024 was driven by several factors. Despite a decline in the overall manufacturing sector, heightened demand from the downstream packaging industry propelled the US Isopentane market upward. This demand surge, along with constrained inventory levels, exerted upward pressure on prices. Additionally, the rise in Brent crude oil prices, which averaged USD 90 per barrel in April—up from USD 85/b in March—contributed to higher input costs for industrial chemicals. The increase in crude oil prices was driven by falling global oil inventories and geopolitical tensions, particularly the conflict between Iran and Israel, which added uncertainty to the Middle East region.

In a similar fashion, prices remained elevated in the European region, particularly in Belgium, where Isopentane prices surged by approximately 1.5% until the middle of the month. Similarly, in April, Isopentane prices increased by around 2.2%, driven by heightened demand from the downstream packaging industry, specifically in the production of expanded polystyrene (EPS) and extruded polystyrene (XPS) foams, leading to increased Isopentane consumption. This surge in demand, coupled with limited inventory levels, likely resulted in price escalation. Furthermore, the rise in Brent crude oil prices in April contributed to higher input costs for industrial chemicals. Consequently, the overall upward trend in April probably impacted the costs of raw materials, including those essential for Isopentane production.

Asian Pacific countries mirrored the pricing trends observed in the US and Europe. In the Indian market, Isopentane prices climbed by approximately 2% this month. Similarly, in April 2024, the domestic Isopentane market saw a significant price uptick, notably by 1.6%, primarily due to material shortages. This scarcity was exacerbated by heightened demand in the packaging sector, particularly for Expanded Polystyrene production. As Expanded Polystyrene heavily relies on Isopentane, increased demand for packaging materials further strained the already limited Isopentane supply, leading to a notable price surge. The heightened demand for Expanded Polystyrene prompted manufacturers to ramp up production, increasing Isopentane consumption and worsening the supply shortage, thereby driving prices upward in the domestic Isopentane market.

In conclusion, Analysts anticipate that Isopentane prices will continue on a similar trajectory in the near future, influenced by downstream demand and volatility in the crude oil market, particularly due to ongoing geopolitical issues.

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