Isopropyl Acohol: Range Fluctuations in the First Half of the Year, It is Difficult to Make a Breakthrough in the Second Half of the Year

In the first half of 2022, the overall performance of the isopropanol market was unsatisfactory. Some new production capacity was released, but at the same time some production capacity was eliminated. The production capacity remained stable compared with last year, but the pressure on supply and demand remained unabated. The pressure on the inventory of some factories still depends on the relief of export demand.

In the first half of 2022, the isopropanol market as a whole will be at a low and medium level and will be mainly volatile. Taking the Jiangsu market as an example, the average market price in the first half of the year was 7,343 CNY/ton, up 0.62% month-on-month and down 11.17% year-on-year. Among them, the highest price was 8,000 CNY/ton, which appeared in mid-March, and the lowest price was 7,000 CNY/ton, which appeared in April.

Range volatility Limited amplitude

In the first half of 2022, the isopropanol market basically showed a trend of rising first and then falling, but the fluctuation space was relatively limited. From January to mid-March, the isopropanol market fluctuated and rose. In the early days of the Spring Festival, the market activity gradually declined, and the trading orders were mostly wait-and-see, and the market price basically fluctuated in the range of 7050-7250 CNY/ton; after the Spring Festival, the upstream raw material acetone and propylene market rose to varying degrees, driving isopropyl Alcohol factories increased their enthusiasm, and the focus of domestic isopropyl alcohol market discussions quickly rose to 7500-7550 CNY/ton, but affected by the sluggish recovery of terminal demand, the market gradually fell to 7250-7300 CNY/ton; in March, export demand was strong , Some isopropyl alcohol factories were exported to the port, and the superimposed WTI crude oil futures price quickly exceeded 120 US dollars / barrel. Isopropyl alcohol factories and market offers continued to increase. Under the buying mentality of the downstream, purchase intentions increased. By mid-March, the market took advantage of the trend. It rose to a high level of 7900-8000 CNY/ton. From March to the end of April, the isopropanol market continued to decline. On the one hand, Ningbo Juhua’s isopropyl alcohol plant was successfully produced and exported in March, and the balance of supply and demand in the market was broken again. On the other hand, in April, the logistics capacity in the region declined, resulting in a gradual shrinking of domestic trade demand, approaching 4 In January, the market price fell to a low level of 7000-7100 CNY/ton. From May to June, the isopropyl alcohol market fluctuated within a narrow range. After the continuous decline in prices in April, some domestic isopropanol plants were shut down for maintenance, and the low market price was tightened, but domestic demand was flat. The range is 7200-7400 CNY/ton.

The rising trend of total supply is obvious, and export demand has also rebounded

Domestic production: Ningbo Juhua's 50,000-ton/year isopropanol unit was successfully produced and sold in March, but at the same time Dongying Haike's 50,000-ton/year isopropyl alcohol unit was dismantled. According to the methodology of Zhuochuang Information , removed from the isopropanol production capacity, making the domestic isopropanol production capacity stable at 1.158 million tons. In terms of output, export demand was acceptable in the first half of the year, and output showed an upward trend. According to the statistics of Zhuochuang Information: in the first half of 2022, China's isopropanol production was about 255,900 tons, an increase of 60,000 tons or 30.63% year-on-year.

In terms of imports: Due to the increase in domestic supply and the surplus of domestic supply and demand, the import volume has shown a downward trend. From January to June 2022, China's total import of isopropanol is about 19,300 tons, a year-on-year decrease of 2,200 tons, a decrease of 10.23%.

Exports: At present, the domestic supply pressure is unabated, and the inventory pressure of some factories still depends on the relief of export demand. From January to June 2022, the total export volume of isopropanol in China is about 89,300 tons, an increase of 42,100 tons or 89.05% year-on-year.


Focus on cost-side trends and export demand in the second half of the year

In the second half of 2022, from the perspective of supply and demand fundamentals, there is currently no new isopropanol plant on the market, the domestic isopropanol production capacity will remain at 1.158 million tons, and the domestic output will still be dominated by the acetone hydrogenation process. With the rising risk of stagflation in the global economy, the export demand for isopropyl alcohol has weakened. At the same time, the recovery of domestic terminal demand is sluggish, or there may be a situation of "not prosperous in peak season". In the second half of the year, the pressure on supply and demand will remain unabated. From the perspective of cost, considering that some newly built phenol and ketone plants will be put into operation in the second half of the year, the supply of acetone market will continue to exceed demand, and the price of acetone, a raw material at the upper end, will continue to fluctuate at a mid-to-low level. The focus of international oil prices may shift downward, and the cost side is the main factor affecting the price of propylene. The market price of propylene in the second half of the year will be lower than that in the first half of the year. On the whole, the cost pressure of isopropyl alcohol enterprises in the acetone hydrogenation process is not high for the time being, and the cost pressure of isopropyl alcohol enterprises in the propylene hydration method is expected to ease. insufficient. It is expected that the isopropyl alcohol market will maintain a range-bound pattern in the second half of the year, and pay attention to the price trend of upstream acetone and changes in export demand.