Positive Factors Drive March Butanol Price Increase by Over 40%

April 2nd News

According to the commodity market analysis system, as of March 31, 2026, the reference price for n-butanol in Shandong, China, was 8,533 CNY per ton. Compared to March 1 (when the reference price for n-butanol was 6,033 CNY per ton), the price increased by 2,500 yuan, a 41.44% increase.

I. Review of Price Trends

In early March (March 1-10), influenced by geopolitical tensions, the cost side pushed the market for n-butanol in Shandong to rise rapidly. Due to cost pressure, major factories in Shandong significantly increased their factory prices, with the price surging to 8,566 CNY/ton on March 10.

In mid-March (March 11-19), the n-butanol market in China experienced a price adjustment. The high prices in the earlier period prompted some companies to restart their facilities, leading to a temporary increase in market supply. Coupled with cautious purchasing from downstream buyers, the price briefly fell to 7,866 CNY per ton.

In late March (March 19-31), the n-butanol market in China saw another rise. The maintenance facilities had not fully resumed production, and imported supplies were reduced due to the impact of international logistics, leading to a tighter supply. At the same time, enterprise inventories remained low, with a strong intention to maintain prices, pushing the price back above 8,500 CNY/ton.

II. Analysis of Core Influencing Factors

Cost Side: The crude oil-propylene chain has surged dramatically, creating rigid support.

In March 2026, the tense geopolitical situation in the Middle East pushed up international crude oil prices, with U.S. crude oil prices increasing by more than 39% in a single month. This directly led to significant increases in the prices of upstream raw materials such as naphtha and propylene. Propylene is a major component in the production of n-butanol, so the sharp rise in propylene prices increased production costs for companies, reinforcing market expectations of higher prices.

Geopolitics and Logistics: Disruptions to International Supply Chains, Leading to Reduced Imports

The decline in shipping efficiency through the Strait of Hormuz has led to delays in the arrival of some imported butanol supplies, causing China's port inventories to fall by 10%-15% month-on-month and weakening the effect of import replenishment.

Overseas facilities are operating at less than full capacity due to energy costs, leading to a tight supply in the international market. Chinese companies have raised their export quotes accordingly, which has alleviated the phenomenon of price inversion between domestic and international markets, further supporting prices in China.

Market Supply and Demand Impact

The market’s optimism about the peak season of “Golden March and Silver April” has amplified the impact of marginal changes in supply and demand, driving prices to rise beyond expectations.

Future Market Forecast

Macro and Supply-Demand Direction Analysis

Supply side: As maintenance facilities gradually resume production, the industry's operating rate is expected to rise in April, and supply pressure will gradually ease. However, if the price of propylene, the raw material, remains high, companies' willingness to operate will still be limited.

On the demand side: The traditional peak season of “Silver April” will continue to support essential demand, but downstream buyers’ acceptance of high prices has reached a critical threshold. If prices keep rising, it cannot be ruled out that buyers may adopt a wait-and-see attitude toward procurement.

Macro Risks: If the situation in the Middle East eases, the resulting pullback in crude oil prices will directly impact cost support for propylene and n-butanol, so we need to remain vigilant about the risk of price corrections. However, if geopolitical conflicts persist, costs will continue to dominate market trends.

Technical Analysis

From the spot market analysis system, it can be seen that at the beginning of March, the 10-day moving average of n-butanol crossed above the 20-day moving average, and all the short-term (10-day) moving averages were higher than the long-term (20-day) moving averages. In March, the overall trend of the n-butanol market in China was upward. At the end of March, the 10-day moving average of n-butanol once again crossed above the 20-day moving average, thus predicting that in the short term, the spot market price of n-butanol in China is likely to continue to show an upward trend. However, auxiliary indicators show that the current n-butanol price is at a high level among the 5 levels, so it is predicted that the future price increase of n-butanol will be limited, mainly characterized by high-level fluctuations. It is necessary to closely monitor the fluctuations in crude oil prices, the operation status of facilities, and changes in downstream orders.