Higher Raw Material Costs Drive Isopentane Prices in the US and European Markets

The price of Isopentane exhibited an upward trend in Europe and the US regions during September 2023. This price increase can be attributed to various economic factors, such as higher raw material costs, elevated interest rates, etc.

In Belgium, there was a slight improvement in Isopentane demand, but the available supply was insufficient to meet domestic requirements. Consequently, domestic manufacturers raised the prices of Isopentane in response to increased demand and market conditions. This increased demand has the potential to exert upward pressure on prices, as suppliers may seek to capitalize on the situation and maximize their profits. Additionally, the rising interest rates impacted raw material prices, resulting in an overall increase in product cost. Additionally, consumer confidence slightly improved in September 2023 compared to August 2023. The extended period of declining availability had depleted product stocks, but September 2023 witnessed a slight uptick in demand, prompting the need to replenish product supplies in the market.

The upstream Naphtha prices increased by 7%, and Brent crude oil prices rose 5.8% during September 2023 in the European region. This increase in raw material costs affected the downstream derivative industries and led to a rise in the production cost of Isopentane.

In the US, Isopentane prices followed a similar trend in September 2023, increasing due to higher raw material prices. The recent uptick in oil prices has led to increased costs for oil-derived products and transportation. Specifically, the raw material naphtha prices saw an 8% increase and upstream crude oil prices rose by 7.4% during September 2023 in the US region. In response to these rising costs, companies sought to pass on these higher operating expenses to customers, resulting in the fastest rise in selling prices of Isopentane during September 2023. This increase in selling prices was also facilitated by a growth in workforce numbers as companies aimed to expand their capacity. The rise in new orders and increased output further encouraged firms to continue hiring in September. Some manufacturers noted that improved demand conditions had played a role in supporting the expansion in output.

As per ChemAnalyst, the cost of Isopentane was settled at USD 1540/MT on a FOB Houston basis with a monthly inclination of 1.3% during September 2023.

The cost of Isopentane is anticipated to increase in the European and US regions due to the volatility in crude oil and raw material Naphtha prices in the market. These fluctuations in raw material costs are likely to impact the pricing of Isopentane, leading to higher overall costs for the product in these regions.