European oxo alcohols prices drop to multimonth lows

The European oxo alcohol spot market has experienced a weak first half of Q2, with prices steadily dropping amid worsening derivative demand and pressure from falling feedstock costs, according to data from Platts, part of S&P Global Energy.

Demand in the oxo alcohol markets has failed to improve throughout Q2, as hopes for an increase in consumption supported by the "coatings season" did not materialize. The coatings season has failed to lead to a rise in demand for the past few years in Europe, leading some participants to state that "we should not call it coatings season anymore if it is not going to happen."

Market sentiment has been pessimistic since the lack of a demand boost from coatings, resulting in falling prices in the n-butanol and isobutanol markets. Prices had increased earlier in Q1, following a rise in the key feedstock propylene monthly contract price.

Since April and the rising number of tariffs in global trade, propylene pricing has dropped significantly, with oxos following the trend, as demand remained at low levels.

Platts, part of S&P Global Energy, last assessed the NBA spot price at Eur1,210/mt ($1,350/mt) FD NWE on May 15, the lowest price since Feb. 1, 2024, and Eur110/mt down since the end of Q1.

Platts last assessed the IBA spot price at Eur1,020/mt FD NWE, the lowest price since Jan. 9, and Eur30/mt down since the end of Q1.

Uncertainty in global trade has had a direct impact on the European automotive sector, which is one of the main outlets for coatings and plasticizers, key downstream markets for oxo alcohols.

Coatings producers described market conditions as "very bad" and saw no signs of improvement from the automotive market this year.

Despite the poor conditions in derivative markets, n-butanol remained "the stronger molecule," according to producers, due to its balanced market conditions, with oversupply not a major concern.

The 2-Ethylhexanol market has experienced similar conditions due to its key derivative plasticizer markets going through a rough year. Plasticizers used in automotive and construction applications, similar to coatings, have also suffered from low demand and reduced operating rates.

The difficult conditions in the downstream, coupled with oversupply of material in the 2-EH market, meant that pricing had been more susceptible to influence from feedstock pricing movements and pressure from buyers.

Furthermore, European material encountered difficulties finding buyers in the important Turkish export market, as it was outpriced by US and Asian material. US material has not been a staple in Turkish markets, but the changes in global trade flows caused by US tariffs resulted in US material reaching the country more frequently, according to European sources.

Platts last assessed the 2-EH spot price at Eur1,200/mt FD NWE on May 15, lowest price since Aug. 31, 2024, and Eur70/mt down since the end of Q1.

Looking ahead, participants have expressed pessimism for the rest of Q2, as no signs of a recovery have been offered by the market. Some players are still hopeful of an uptick in construction demand during the summer period, but there are still no concrete signs of an improvement, according to the same sources. Most participants anticipate that without a shift in fundamentals, 2025 will be another underwhelming year for the oxo alcohols industry.