The European Butanediol Market is Under Pressure From Imports and a Lack of Demand

Germany- The European Butanediol prices remained constrained in mid-January 2023 because of cost-effective imports and ongoing demand uncertainties in the regional market. China exports Butanediol to European countries, and the production strength in the Chinese market continued to operate soundly. Moreover, the demand outlook from downstream Tetrahydrofuran and PTMEG sectors is still recovering despite the recovered economic conditions and eased supply chains from Asian countries. In mid-January 2023, the market prices of Butanediol ranged between USD 1590-1700 per MT, DDP Frankfurt (Germany).

The facets governing Butanediol's final European market prices are the energy prices and the demand-supply position. In his speech at the World Economic Forum, the German Chancellor Olaf Scholz informed that despite being forced to shift away from the Russian gas it had become so reliant upon, Europe's largest economy is back on track. Unlike the predicted economic uncertainty and threatening recession, the Butanediol market remained stable for the past two weeks as the suppliers continued to witness frequent inquiries about the product, and end-use manufacturing units operated with sufficient staff and machinery to cater to the domestic demand. However, a slight pause in the supply chain was witnessed as the entire Chinese (exporter) market volume was small, and midstream and downstream businesses entered the vacation state beforehand because of the approaching Spring festival in China. Moreover, the feedstock (Maleic Anhydride) prices remained stable in the domestic market, proportionally impacting the production cost for Butanediol.

As per ChemAnalyst, the market prices of Butanediol are expected to incline in the European market as the importing prices are anticipated to increase. The recovery in the Chinese market may impact the European market as the end-use manufacturing units will follow the inclining curve. The European Central Bank is expecting smaller interest rate hikes in the regional market to tame the rising inflation rate.