September 11th News
September iso-octanol prices surged significantly in China
According to the commodity market analysis system, the price of 2-ethylhexanol on September 11 was 9766.67 CNY/ton, a significant increase from 8833.33 CNY/ton on September 1, with a price increase of 10.57%. In early September, the price of 2-ethylhexanol in China showed an upward trend with fluctuations. The mainstream ex-factory price in Shandong increased from around 8800 CNY/ton at the beginning of the month and is currently at a high level for the year. The momentum for further increases is gradually weakening, and there is a higher risk of high-level fluctuation and stagnation in the future.
Middle East Geopolitical Competition Intensifies
In September, the U.S.-Iran maritime conflict escalated, leading to a decline in shipping traffic through the Strait of Hormuz and a sharp surge in tanker insurance premiums. In early September, the Houthi armed group intensified its offensive, capturing the Red Sea port of Mocha and the Hanish Islands on September 10, thereby strengthening its control over the Bab al-Mandeb Strait. Market concerns mounted that the simultaneous strain on both the Strait of Hormuz—the primary route for crude oil from the Persian Gulf—and the Bab al-Mandeb Strait—the gateway to the Red Sea—could trigger a dramatic spike in international crude oil prices. On September 11, Oman took the lead in mediating efforts, and on September 14, Iran’s foreign minister is scheduled to meet with his counterparts from the six Gulf states in Salalah, Oman, with the aim of negotiating a temporary agreement on the passage of commercial vessels through the Strait of Hormuz. This marked a significant signal of de-escalation, and as a result, crude oil prices quickly retraced during trading on the 11th.
The cost of propylene has significantly increased in China.
According to the commodity market analysis system, the propylene quotation on September 11 was 10,051 CNY/ton, an increase of 8.92% from the propylene quotation of 9,227.67 CNY/ton on September 1. The escalation of geopolitical conflicts in the Middle East led to a significant jump in crude oil prices in early September, with oil prices surging past the $100 mark and experiencing extreme volatility. This has provided cost support for propylene and isooctanol, but the geopolitical premium could quickly retract, posing a high risk of volatility at high levels. With propylene fluctuating at high levels and supported by crude oil, there is strong cost support for isooctanol. However, the room for further significant increases in propylene prices is limited, reducing the impetus for further cost-driven increases.
Supply Side
The overall operating rate of the 2-ethylhexanol industry is 70%-75%, which is below the usual level. The supply is expected to tighten, and with Hualu Hengsheng planning maintenance in September, major manufacturers are controlling and limiting orders in phases, leading to a smaller amount of available spot goods. The overall supply of 2-ethylhexanol in China in September is expected to be tight.
Demand Side
"Golden September" peak season expectations have led to a slight increase in the operating rates of downstream DOP. Rigid demand procurement has shown some improvement, following the price increases of 2-ethylhexanol; however, the actual demand for end products such as PVC and plastic goods remains moderate, rather than experiencing a strong surge. Most purchases are made to meet immediate needs, with little intention to stockpile. Other downstream demands remain stable, providing limited support to the market. Overall, the expectation for an increase in 2-ethylhexanol demand is growing.
Outlook for the Future
The analyst specializing in octanol product data believes that the combination of higher crude oil prices, maintenance at isooctanol plants, and expectations of a rebound in peak-season demand is driving up isooctanol prices. However, isooctanol prices have already reached their highest level for the year, and downstream users are reluctant to accept these high prices, showing little willingness to chase further price increases. Moreover, geopolitical developments remain highly volatile, posing a risk of a sharp drop in oil prices at any time. Overall, while the likelihood of further price increases for isooctanol remains relatively high, the room for significant upward movement is limited. As a result, isooctanol prices will likely fluctuate at high levels in mid-to-late September; traders should be vigilant about the risk of a sharp rally followed by a pullback. Particular attention should be paid to the risk of a substantial correction in crude oil prices.
