Supply Tightening, Weak Demand, Average Price Contraction, Isooctanol Rebounds and Adjusts

May 26 News

2-Ethylhexanol Price Rebounds and Adjusts

According to the commodity market analysis system, the price of 2-ethylhexanol on May 26 was 8,033.33 CNY/ton, which first increased and then decreased from 8,800 CNY/ton at the beginning of the month, a price decrease of 8.71%. The price of propylene has fallen, leading to a decrease in costs, but the downstream market is not performing well, and there is weak demand for 2-ethylhexanol, causing its price to fall. Conversely, as the operating load of 2-ethylhexanol production facilities in China has decreased, the supply of 2-ethylhexanol has tightened, leading to stabilization in its price.

The high cost support for propylene in China has weakened.

According to the commodity market analysis system, with more propylene plants resuming operations in May, propylene supply increased. Due to weak demand, propylene prices fluctuated and declined. However, the uncertainty of the geopolitical situation in the Middle East may support raw material costs, preventing prices from falling further. Propylene prices remain relatively high historically. As crude oil prices retreat, the support for propylene price increases is insufficient. The cost-side marginal support for 2-ethylhexanol is weakening.

Isobutanol operating load decreases in China

At the end of April, the operating load of 2-ethylhexanol enterprises in China increased to 98%. In May, the operating load of 2-ethylhexanol facilities in China decreased to 70%, leading to a reduction in 2-ethylhexanol supply. The supply contraction has further supported the rise in 2-ethylhexanol prices.

Downstream plasticizer DOP prices fluctuated and declined in China.

According to the commodity market analysis system, as of May 26, the DOP price was 9,300.83 CNY/ton, a 7.46% decrease from the DOP price of 10,050.8 CNY/ton on May 1. The downstream plasticizer market performed mediocrely, with downstream factories only maintaining rigid demand procurement, showing no intention for large-scale stockpiling or inventory buildup. Previously, exports had been a bright spot in supporting demand, but in May, the export volume of 2-ethylhexanol declined, possibly around 20,000 tons, indicating a significant drop compared to April. Both domestic demand and exports are weak, coupled with the continuous release of new 2-ethylhexanol production capacity, leading to a deteriorating supply and demand situation, exacerbating the oversupply condition of 2-ethylhexanol.

Spot market trend forecast:

From the trend of the isooctanol price moving average: The difference between the 10-day moving average of isooctanol and the isooctanol price moving average is contracting, and the isooctanol price moving average is clearly crossing above the 10-day price moving average, indicating a stronger short-term upward signal for isooctanol in China.

Outlook for the Future

The analyst specializing in octanol product data believes that, in the short term, a significant drop in the operating rate of isooctanol will lead to tighter supply, providing strong support for rising isooctanol prices and easing downward pressure on its price, thus stabilizing isooctanol prices in the near term. In the medium to long term, however, the oversupply situation for isooctanol will intensify, coupled with insufficient support from rising raw material costs, resulting in considerable downward pressure on isooctanol prices. Therefore, in the medium to long term, isooctanol prices are expected to decline.