Introduction: Fluctuations in the international situation have driven up propylene prices alongside international crude oil, providing strong cost-side support for n-butanol. However, downstream resistance to high prices has emerged, leading to a brief downturn in overall market transactions. Consequently, the domestic n-butanol market has experienced volatile operations with frequent and rapid adjustments.

I. The n-butanol market rose first and then fell.

Recently, the domestic n-butanol market has been significantly impacted by changes in the Middle East situation. Initially, the sharp rise in international raw materials drove a substantial increase in propylene prices. Later, propylene prices retreated rapidly from high levels. Both phases heavily influenced n-butanol from the cost side. Beyond cost factors, changes in downstream procurement were another major driver. When propylene prices surged initially, some downstream users, with low n-butanol inventories, increased their purchasing interest. This led to active inquiries and transactions in the market. Coupled with the execution of export orders by some producers, the tight supply situation resurfaced, pushing transaction prices higher. As prices peaked, market resistance grew, inquiries gradually decreased, and some producers faced shipment difficulties, prompting them to proactively lower ex-factory prices for adjustment. However, some producers, supported by export orders, maintained high prices, resulting in a market polarization.

II. Tight n-butanol supply supports high prices.

As n-butanol and downstream plants gradually resumed operations, market supply increased. Simultaneously, downstream demand continued to climb. Notably, exports of butyl acrylate and butyl acetate increased significantly. The overall operating rate of downstream sectors kept rising, leading to greater demand for raw materials. Consequently, the overall growth in n-butanol supply was less than the increase in demand. Additionally, rising n-butanol exports further boosted consumption. Therefore, the domestic n-butanol market remains in a tight supply state. Producers are operating with low inventories, and spot supply is limited, providing strong support for high n-butanol prices.

III. Rising propylene prices continue to provide cost-side support for high n-butanol prices.

Changes in the international situation caused extreme fluctuations in international crude oil, further exacerbating the reduction in propylene supply. As propylene supply decreased, prices began to rise accordingly. The continuous increase in propylene prices strengthened the cost-side support for n-butanol. This, combined with growing export orders and increased downstream demand, drove n-butanol market prices higher.

IV. Market Outlook

Supply Side: Looking ahead, international crude oil and propylene prices, along with the gradual reduction in propylene supply, are expected to increase the likelihood of further propylene price hikes, adding to n-butanol's cost pressure.

Demand Side: Subsequently, n-butanol's major downstream sectors are expected to enter their traditional peak season. The recovery of end-users will increase demand for n-butanol derivatives, supporting the operating rates of downstream n-butanol plants and stabilizing their demand for n-butanol.

Overall, domestic n-butanol supply is expected to show slow growth. However, some producers still have export orders to fulfill and continue to operate with low inventories, meaning overall market supply is likely to remain tight. While the operating rates of downstream butyl acrylate and butyl acetate plants are expected to decline slightly later, the overall change will be minor, having little impact on raw material demand. Therefore, the domestic n-butanol market is forecast to operate with volatile but firm strength.