Concurrent decline in costs and demand drives downward shift in domestic n-butanol market center

Introduction: Recently, the domestic n-butanol market price has continued to decline, with trading activity steadily weakening. This trend is primarily attributed to the commissioning of new production units and the consecutive drop in propylene feedstock prices, which have reduced cost support. The combined effect of these factors has caused the market price center to shift downward continuously.

1. Continuous Decline in n-Butanol Prices

Recently, the price center of the domestic n-butanol market has declined continuously, with high-end prices disappearing from the market. Firstly, the commissioning of new units indicates a further increase in market supply, which affects downstream operations. Downstream buyers' willingness to take delivery has decreased significantly, leading to cautious purchasing based solely on rigid demand. Consequently, overall market trading sentiment has weakened. Production plants, facing sluggish shipments, have seen inventory levels rise. To maintain low-inventory operations, plants have offered discounts to stimulate sales, causing the production price center to shift downward. Secondly, propylene feedstock prices have dropped noticeably in recent weeks, reducing n-butanol costs and weakening its price support. Additionally, major downstream industries are slowly entering their traditional off-season, resulting in a gradual decline in raw material demand.

2. Slow Recovery in Operating Rates; Supply Remains Ample

In the domestic n-butanol market, units at Daqing Petrochemical, Jilin Petrochemical, Anhui Shuguang, and Shaanxi Yanchang remain shut down for maintenance. Furthermore, due to ample market supply, poor shipment rates, falling prices, and declining profits, some plants—including Shandong Luxi and Jiangsu Huachang—have reduced their operating loads. Despite this, the overall capacity utilization rate of domestic n-butanol remains high, spot supply continues to be sufficient, and the market is operating in a state of oversupply.

3. Consecutive Drop in Propylene Feedstock Prices; Significant Reduction in n-Butanol Costs

Although some maintenance units for domestic propylene have come online recently, reducing market supply, the intensity of downstream follow-up buying has weakened significantly after previous price surges. Most buyers have maintained a strategy of entering the market only for rigid demand at lower prices, leading to a gradual buildup of corporate inventory pressure. Meanwhile, individual propylene oxide plants in the Dongying region are undergoing maintenance, intensifying regional competition for shipments and dragging the transaction price center downward. As raw material prices continue to fall, cost pressure on n-butanol decreases, weakening its price support. Combined with the current oversupply situation in the n-butanol market, trading sentiment has turned weak, and the transaction price center has consequently lowered.

4. Market Outlook

Overall, n-butanol supply is expected to show an upward trend in the future, while demand will decrease as downstream operating rates fall. This will further exacerbate the oversupply situation in the market. Wait-and-see sentiment is rising, and downstream buyers are taking deliveries cautiously, primarily sticking to rigid demand and buying on dips. High-priced transactions are becoming increasingly rare, with the trading center operating at lower levels. Regarding cost and profit margins, propylene feedstock prices are fluctuating at high levels; therefore, high input costs for n-butanol will still provide some support to market prices. It is predicted that domestic n-butanol market prices will undergo volatile consolidation.