Indian N-Propanol & NPAC Prices Decline Amid Weak Demand, Expected Rebound Post-March

Key Highlights:

• Price Drop: N-Propanol down ₹1/kg; NPAC down ₹2/kg due to weak demand.
• Market Demand: Seasonal weakness in packaging and inks, but paints and coatings sector shows strong demand.
• Long-Term Outlook: Rising alkyd resin-based paint production to boost NPAC demand.
• Future Trends: Prices expected to rebound post-March as demand stabilizes.

Price Trends: N-Propanol & NPAC Decline Amid Weak Demand

• Importers have reduced N-Propanol prices by ₹1/kg, bringing them down to ₹95/kg (Ex-Kandla) on 60-day credit terms.
• As a result, N-Propyl Acetate (NPAC) prices have also dropped by ₹2/kg, now quoted at ₹92/kg (Ex-Kandla) for advance payments and ₹94++/kg (Ex-Kandla) on 60-day credit terms.
• On a week-on-week basis, both N-Propanol and NPAC prices have declined by approximately ₹2/kg, driven by weak market demand and excess inventory at ports.
• Importers have reduced N-Propanol and NPAC prices due to sluggish market activity and excess inventory.

Supply & Demand Dynamics: Sectoral Trends & Seasonal Impact

• India’s monthly demand for N-Propanol is estimated at 5,000 metric tons, while NPAC demand stands at around 4,000 metric tons. The primary consumers of NPAC include the paints, inks, packaging, bulk drug, and flavors & fragrances sectors.
• Seasonal demand from the packaging and ink industries remained stable in February but turned bearish in March due to financial year-end closures. 
• However, demand from the paints and coatings sector witnessed a significant surge in February and is expected to remain strong throughout March 2025. Market participants anticipate a recovery in NPAC prices post-financial year closing.
• The rising production of alkyd resin-based paints in India is expected to drive long-term NPAC demand.
• Additionally, NPAC replacement costs have declined following a drop in acetic acid prices, which could influence market trends.

Global Market Factors: Crude Oil & Feedstock Price Movements

• On the global front, upstream crude oil prices, benchmarked by WTI, rose by 1.27% to $67.20 per barrel, while natural gas prices slipped by 1.67% to $4.22/MMBtu.
• Feedstock prices were recorded as follows:
  1. FOB China Acetic Acid: $366/MT
  2. N-Propanol: $1,100/MT
  3. NPAC: $1,175/MT

Market Outlook: Price Recovery Expected Post-March

N-Propanol and NPAC prices will remain mixed in the near term. However, firm demand from the inks, paints, and coatings sectors is expected to support NPAC prices. Buyers are advised to take advantage of inventory opportunities at lower price levels, as NPAC prices are likely to rebound after March 2025.