September 18th, news:
In September, the price of 2-ethylhexanol in China surged and then declined.
According to the commodity market analysis system, the price of 2-ethylhexanol on September 18 was 9,733.33 CNY/ton, which first increased and then decreased compared to the price of 8,833.33 CNY/ton on September 1. The price increase was 10.19%; compared to the price of 9,900 CNY/ton on September 15, it decreased by 1.68%. In September, the price of 2-ethylhexanol first surged significantly. By mid-month, the room for further increases in the price of 2-ethylhexanol was largely closed, and quotations began to retreat, entering a phase of high-level fluctuation and bargaining.
Middle East Geopolitical Competition
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. As a result, navigation through the Strait of Hormuz was disrupted, and the Saudi east-west oil pipeline was temporarily shut down following an attack, severely restricting crude oil exports. The volume of crude oil that could be shipped abroad shrank dramatically, driving up insurance and shipping costs significantly and amplifying expectations of supply tightness. By mid-September, as prospects for pipeline repairs began to brighten, risk premiums rapidly reversed, and the premium over previous levels was quickly unwound. Oman took the lead in attempting to mediate a resolution to ensure safe passage through the Strait of Hormuz, but no substantive ceasefire agreement was reached. Instead, the likelihood of all-out conflict diminished, prompting long-position holders to take profits and exit the market. Consequently, geopolitical premiums were unwound, and oil prices retreated from their earlier highs.
Propylene costs fluctuate and rise in China
According to the commodity market analysis system, on September 18, the propylene quote was 9,701 CNY/ton, an increase of 5.13% from the propylene quote of 9,227.67 CNY/ton on September 1. Due to the influence of geopolitical conflicts in the Middle East, crude oil prices surged significantly in early September, quickly rising above the $100 mark before rapidly falling back. This provided a cost floor for propylene and isooctanol. As the geopolitical premium retreated, propylene prices fluctuated and declined. The momentum for the increase in the cost of isooctanol has weakened.
Supply Side
The overall operating rate of the 2-ethylhexanol industry in China is 70%-75%, which is lower than the same period in previous years, leading to a tightening supply expectation. Additionally, Shandong Hualu Hengsheng has planned maintenance in September, providing strong support for prices in the first half of the month. Major manufacturers are controlling and limiting orders in phases, resulting in a limited amount of available spot goods. After the price surge, downstream buying interest weakened, and manufacturers' inventories began to accumulate slightly, increasing the willingness to lower 2-ethylhexanol prices in the middle of the month.
Demand Side
"Golden September" peak season, but the actual demand did not match the price increase. Downstream DOP production saw a slight month-on-month recovery, and rigid demand procurement also showed some improvement. Contract orders were still acceptable, but the willingness to chase higher spot prices was weak. After n-butanol prices reached a high point, downstream buyers resisted the high prices, mainly focusing on depleting inventories and fulfilling long-term contracts, leading to a slowdown in spot transactions. "
Outlook for the Future
The product data analyst for 2-ethylhexanol believes that in September, the surge in the price of propylene, coupled with supply contraction and peak demand, has driven a significant increase in the market, fostering a strong sentiment for price increases. Prices have reached their highest level of the year, but downstream buyers are under pressure and are refusing to follow the price hikes, leading to a cooling in spot transactions. After the price increase has been overextended, quotations have started to fall back, and 2-ethylhexanol is experiencing high-level volatile trading. Looking ahead, there is little room left for 2-ethylhexanol prices to rise significantly. The risk of a rapid decline in upstream crude oil and propylene prices is quite high, which could put further downward pressure on 2-ethylhexanol. However, the tight supply and robust demand in the 2-ethylhexanol market mean that there is still support for its price floor. It is highly likely that 2-ethylhexanol prices will continue to fluctuate widely at high levels.
