Slow Downstream Demand Curtails European Butanediol Prices

Germany- The price of Butanediol in the European market continued to follow the downward momentum towards mid-November because of retreating demand. The major applications of Butanediol include solvents, polyester, and spandex market. The increasing inflation rate is not helping the manufacturers and end users bring down the Butanediol prices and elevate the demand, respectively. Eurozone inflation is constantly reaching its peak, impacting the economic conditions of major European countries such as Germany, Italy, and the Netherlands. In the third week of November, the Butanediol prices ranged between USD 1940 to 2070 per MT FD Frankfurt (Germany), which followed the declining trend.

According to the reports, the European Central Bank has already announced a hike in the region's interest rate. The bank has stated a hike of 0.75% to cope with the rising inflation. This increment in the interest rate has led to stagflation as the country is facing a labor shortage. Market analyst says that the energy crisis and its regional increment may persist, impacting the production cost. Market participants say the Butanediol manufacturing units are receiving fewer market inquiries about the product, pressuring them to decline the prices. Another facet impacting the prices of Butanediol is the supply shortage of products from Asian countries. Trading quantities have been reduced as the traders and shippers claim that the decline in global consumer demand is in a downward shift in consumption appetites rather than a sign that the world economy is returning to normal after a frantic post-lockdown consumption rush. The concentration of the consumers is shifted more towards the food and grains sectors and less towards the polyester market.

As per ChemAnalyst, the prices of Butanediol may continue to decline further as the inflation rate still threatens the German economy. The demand for the product from downstream sectors may stabilize, yet the availability of sufficient stockpile with the end-use manufacturing units may hinder the Butanediol price increment.