What is the Outlook for Octanol, Which Rebounded Strongly at the End of August?

In August, the domestic octanol market generally showed shocks in the mainstream range of M-type boxes, and the trend of rapid jumping at the end of the month. At the beginning of the month, the domestic octanol market, which was fluctuating and declining, stopped falling and stabilized, and the price rose compared with the end of July, out of a wave of bottoming out. As of August 12, the mainstream price of octanol in various regions was reported to be 8400-8500 CNY/ton. Compared with the beginning of the month, it increased by 400 CNY/ton, and the rebound rate was 5%. In the middle of the month, on August 16, affected by the deep drop in international oil prices for two consecutive days, the price of octanol fell to the lowest point since August to 8000-8100 CNY/ton, and then quickly rose to 8300 CNY/ton, but since 22 Since the beginning of the day, the octanol market has weakened again. The mainstream price of octanol in various regions is about 8200-8300 CNY/ton. As of the 27th, the mainstream price of octanol in the August market fluctuated between 8,000-8,500 yuan in M-type fluctuations. On the 29th, the market price of octanol suddenly jumped by 300-400 CNY/ton to 8600-8800 CNY/ton and continued to rise. After breaking through the 9000 CNY/ton mark on the 30th, the market price on the 31st jumped to 9300 CNY/ton. the highest point in nearly 2 months.


market cause

1.
International crude oil fluctuates

Entering August, the international oil price fell below 100 yuan for the fourth time this year, fluctuating between US$85-100/barrel. On July 29, the closing price of the international oil price WTI 09 contract was US$98.62/barrel. On August 4th, it fell to the bottom of the stage at US$88.54/barrel, and gradually rose to US$94.34/barrel on August 12th, an increase of US$5.8/barrel from the bottom. It was up nearly 6.6% in a week. During the same period, the Brent 09 contract closed at $99.57/barrel, up $5.45/barrel from the bottom, or nearly 5.8%. On August 15 and 16, international crude oil prices fell deeply for two consecutive days. On the 16th, the Brent 09 contract closed at $92.34/barrel, down $5.81/barrel, and the WTI 09 contract closed at $86.53/barrel, down $5.56/barrel , have dropped all the gains since August, and fell to the price before the surge in oil prices at the end of January this year. Then oil prices rose rapidly. The ups and downs of oil prices affect the ups and downs of market sentiment, and drive the market price fluctuations of octanol and other products.

2.
Influence of raw material propylene

Since August, the domestic propylene market has continued to weaken, with prices rising and falling, continuing to decline. The mainstream price in the market dropped from 7,360 CNY/ton at the beginning of August to 6,835 CNY/ton at the end of August, a decrease of about 7%. Propylene prices weakened and the cost impetus to the octanol market weakened.

3.
The impact of the start-up change of octanol plant

Since mid-July, the operating rate of the octanol plant has shown a V-shaped trend. The reduction in the operating rate of the octanol plant and the reduction in external supply is favorable for the market price to go up; on the contrary, it drags the market price down. On August 28, Tianjin Bohua Yongli's octanol plant with a production capacity of 140,000 tons was temporarily shut down for maintenance. Affected by this, the market price soared to 9,300 CNY/ton after jumping, an increase of as high as 8% within three days.

4.
Downstream Profit and Impact of Changes in Start-up

Since the end of July, DOTP, the downstream product of octanol, has been in a state of loss; since August 11, DOP's sample gross profit has also suffered losses and small profits. Affected by the profitability, since mid-July, the operating rate of DOP and DOTP has generally been low, about 40%~52%, a drop of nearly 15% compared with the previous high month in mid-June, which has seriously affected the demand for octanol. and affordability to its price. It will take time for the downstream to digest and transmit the cost pressure downwards.

5.
Impact of climate and power curtailment policies

This year, the country has generally sustained high temperatures, especially in the southern region where a large-scale extreme high temperature weather process has occurred. According to data released by the China Meteorological Administration, the intensity of this round of high temperature weather has reached the strongest since China has complete meteorological records (since 1961). As of August 23, the Central Meteorological Observatory has issued a high temperature red warning for 12 consecutive days. The extreme high temperature has caused a sharp rise in the electricity load, and the air-conditioning load has exceeded 25 million kilowatts, a year-on-year increase of 35%. A number of listed companies have issued cessation announcements of "making electricity available to the people", involving photovoltaics, chemicals, semiconductors and other industries. In addition to Sichuan, Shandong, Jiangsu, Anhui, and Zhejiang, the major chemical provinces, all have power and production restrictions to varying degrees, and even some industrial lines in individual provinces have partially or completely stopped production. The power rationing policy will prolong the delivery period of foreign trade exports, affect the stocking cycle, increase inventory pressure, and affect the enthusiasm for purchasing. Most companies just need to stock up.

6.
Import and export effects

In July 2022, my country's octanol imports increased significantly and exports dropped sharply. The month's import volume was 16,908.71 tons, an increase of 2,499.26 tons or 17.34% from the previous month. The cumulative import volume from January to July 2022 is 100,558.92 tons. In July 2022, my country's export volume of octanol in that month was 2,312 tons, a decrease of 5,796 tons from the previous month. plunged 71.48%.


market outlook

Recently, the trend of octanol after a short-term surge is expected to fluctuate within a narrow range. With the recovery of downstream demand and the follow-up of digestion and conduction capacity, the market price of octanol may still continue to rise.

1.
Oil prices bounce back

On August 23, due to concerns that OPEC and its allies cut production in response to the restart of the Iran nuclear deal, crude oil futures in Europe and the United States rebounded strongly, and the market sentiment improved. On August 23, the settlement price of WTI October futures was US$93.74 per barrel, an increase of US$3.38 or 3.7% over the previous trading day, and the trading range was US$90.42-94.22; the settlement price of Brent crude oil futures was US$100.22 per barrel, which was higher than that of the previous trading day. It rose $3.74, or 3.9%, on the trading day to trade in a range of $96.53-$100.45. WTI October futures settled at $91.64 a barrel on August 30, while Brent crude futures settled at $99.31 a barrel. Although they plummeted by $5.37-5.78/barrel from the previous trading day, they rose from the low oil price on August 16: the closing price of the Brent 09 contract was $92.34/barrel, up $6.97/barrel, or 7.5%; The WTI 09 contract closed at $86.53 per barrel, up $5.11 per barrel, or 5.9%.

2.
Downstream demand is expected to recover

As the temperature turns cooler and the power shortage situation will gradually ease, the enterprises that have stopped work and reduced production due to power cuts in the early stage will resume work one after another, which will inevitably lead to an increase in demand. On August 25, the profitability of DOP ton products has increased by 142% compared with last week; the operating rate has also increased. However, for the rapidly soaring octanol price caused by the superimposed hype, it takes time for the downstream to digest and transmit the cost of raw materials.

3.
The price of raw material propylene stopped falling and rebounded

On August 31, the quotation in Shandong, the mainstream propylene market, was about 7,150 CNY/ton, a 4.4% rebound from the week of August 25, and other regions have risen.

4.
Imported raw material prices

Since the beginning of this year, the central parity rate of the RMB against the US dollar has depreciated by 7.33%. The market opened on August 29, and both the onshore and offshore RMB exchange rates against the US dollar fell. The spot exchange rate of the onshore renminbi against the US dollar was as low as 6.92 yuan; the offshore renminbi exchange rate fell as low as 6.93 yuan, both hitting two-year lows. The falling exchange rate has caused the price of imported octanol to rise, which is favorable for the domestic price of octanol to remain relatively high. In July, my country's octanol imports increased by 2,499.26 tons, or 17.34%, from the previous month. The average price imported into China from various countries and regions is about 1495 US dollars / ton. The average import price of general trade is 1471 US dollars / ton, and the average import price of imported processing trade is 1515 US dollars / ton.