In the third quarter, the price center of domestic n-butanol market rose strongly under the dual support of costs and supply-demand fundamentals.

Introduction: In the third quarter, domestic n-butanol prices rebounded strongly from a bottom. Geopolitical tensions intensified, driving up international crude oil prices and consequently raw material costs. Coupled with an increasingly tight supply-demand balance favoring shortages, these dual positive factors propelled domestic n-butanol prices to exceed expectations significantly.

I. Domestic n-Butanol Prices Rebounded Strongly from Bottom in Q3

As of September 24, the average price in Shandong for Q3 was 7,283 RMB/ton, down 56 RMB/ton from Q2 (-0.77%), but up 1,389 RMB/ton year-on-year (+23.57%). The quarterly low occurred on July 6 at 7,850 RMB/ton, while the high was reached on September 14 at 10,600 RMB/ton, resulting in a spread of 2,750 RMB/ton within the quarter.

(Figure 1: Weekly Price Trend of Domestic n-Butanol 2025-2026 (RMB/ton); Figure 2: Daily Regional Price Trend of Domestic n-Butanol 2026 (RMB/ton). Data Source: Chempricehub)

In Q3, the domestic n-butanol market experienced a strong rebound from its bottom. Early in the quarter, the market continued the downward trend from late Q2, hitting lows with sluggish trading activity. However, as some downstream plants restarted operations and initial procurement enthusiasm remained low, downstream inventories depleted, leading to increased purchasing interest. Meanwhile, escalating geopolitical tensions caused international crude oil prices to rise consecutively, driving sharp increases in propylene feedstock prices. This resulted in high production costs, pushing n-butanol producers into loss-making territory. As losses persisted, some units shut down for maintenance or reduced output, continuously shrinking overall supply. By mid-quarter, supply hit rock bottom, recreating a shortage scenario and causing prices to trend upward amid volatility. Toward the end of the quarter, the uptrend accelerated until peak levels were reached. At this point, significant cost pressures pushed major downstream sectors into losses, leading them to gradually reduce operating rates and resist high n-butanol prices. Trading sentiment cooled as maintenance-recovered units began increasing production supply, shifting the market dynamic toward oversupply.

Table 1: Comparison of Mainstream Regional Market Prices for Domestic n-Butanol in Q3 (RMB/ton)

Data Source: Chempricehub

II. Supply Hit Rock Bottom in Q3; Shortage Scenario Recurred

(Figure 3: Quarterly Supply Comparison of Domestic n-Butanol 2025-2026 (RMB/ton); Figure 4: Supply-Demand Comparison of Domestic n-Butanol 2026 (10,000 tons). Data Source: Chempricehub)

Supply Side: By September, domestic n-butanol production for Q3 totaled approximately 643,300 tons, a decrease of 30,600 tons from Q2 (-4.54%). Starting in June, several production units entered maintenance phases. Initially, heightened international tensions disrupted transportation logistics, impacting bulk raw materials and causing propylene prices to climb continuously while its supply declined. Mounting cost pressures pushed n-butanol profits into negative territory, with losses persisting longer than expected. Consequently, some plants brought forward shutdowns for maintenance or reduced output, leading to a continuous decline in market supply that hit annual lows in August.

Demand Side: By September, domestic n-butanol demand for Q3 stood at approximately 634,500 tons, down 18,500 tons from Q2 (-2.83%). Early in the quarter, key downstream products were transitioning from off-season to peak season, resulting in generally low operating rates and weak demand for n-butanol. Towards the end of the quarter, as downstream utilization rates slowly improved and factories replenished previously low raw material stocks, market demand increased steadily.

Table 2: Domestic n-Butanol Supply-Demand Comparison in Q3 (10,000 tons)

Data Source: Chempricehub

III. Domestic n-Butanol Costs in Q3

(Figure 5: Cost-Profit and Raw Material Price Trend Comparison for Domestic n-Butanol 2026 (RMB/ton). Data Source: Chempricehub)

By September, the average production cost for domestic n-butanol in Q3 was approximately 6,990 RMB/ton, down 110 RMB/ton from Q2 (-1.55%). Profit margins averaged around 293 RMB/ton, an increase of 54 RMB/ton from Q2 (+22.59%). Early in the quarter, ongoing geopolitical conflicts drove international crude oil prices higher, significantly boosting propylene prices. During this period, n-butanol operated under conditions of high costs and low profit margins. Late in the quarter, however, international crude oil prices dropped sharply. Simultaneously, domestic propylene plant operating rates began to recover slowly, increasing supply and causing propylene market prices to fall significantly. Despite this, tight n-butanol supply kept its prices consolidating at high levels, resulting in favorable profit margins by the end of the quarter.

Table 3: Comparison of n-Butanol, Raw Materials, and Cost-Profit Data (RMB/ton)

Data Source: Chempricehub

IV. Market Outlook

From a supply perspective, more maintenance-shutdown units are expected to resume operations in Q4. Although some facilities may enter maintenance or reduce output, the net effect will likely be an increase in total production volume. On the demand side, downstream industries are entering their traditional off-season, with operating rates expected to decline and terminal procurement demand potentially weakening. Overall, the domestic n-butanol market structure is shifting toward oversupply in Q4, reducing price support. Additionally, since current profit margins remain relatively healthy, the impact of cost fluctuations on pricing will diminish. Consequently, domestic n-butanol prices are predicted to trend downward with volatility in Q4.