In early November, isooctanol producers proactively raised prices amid concentrated supply reductions. By November 4, the average price in Shandong's isooctanol market reached 6,015 RMB/ton, up 115 RMB/ton or 2% from the end of last month. However, during the first half of the month, the market generally lacked upward momentum and remained weak. By November 14, the average price in Shandong's isooctanol market closed at 5,915 RMB/ton, down 100 RMB/ton from November 4. Since November, isooctanol plants have experienced frequent and concentrated fluctuations. Increased production cuts at factories were largely driven by cost factors, coupled with concentrated shutdowns for maintenance at some facilities. Statistics indicate that since early November, several isooctanol plants have successively shut down or reduced production. These include shutdowns for maintenance at Dongming, Shell, Lanfan, Jiuhong, Baichuan, and Zhejiang isooctanol plants, while Lu Xi, Hualu, and Qilu plants reduced output. The cumulative production loss from these shutdowns and reduced output in November reached approximately 19,000 tons, accounting for over 7% of total supply.
However, downstream consumption remained generally weak, with insufficient effective demand to support the market. Facing actual sales pressure, most downstream factories maintained low-level, just-in-time procurement. From a sentiment perspective, expectations of oversupply persisted following the commissioning of new capacity in South China, causing the market to weaken again in the first half of the month. As previously shut-down plants gradually resumed operations, market expectations for increased supply continued to rise. Facing rising transaction resistance in the spot market, some holders sold at lower prices in advance, leading to a sustained decline in circulating volumes.
For November, the average gross margin in the isooctanol industry is estimated at -8.9%, down 0.7 percentage points from the previous month. Loss pressure has actually intensified, with industry overcapacity pressures becoming apparent. The continuous decline in market prices has caused sustained profit erosion. As market prices fell further in the first half of the month, the loss pressure in the isooctanol industry intensified, becoming one of the primary drivers behind the decline in operating rates since the beginning of the month. Therefore, although the isooctanol market failed to reverse its weakness before mid-month, the impact of supply losses gradually became apparent in the latter half of the month. On one hand, circulating spot resources gradually decreased. On the other hand, as downstream factories concentrated on purchasing contracted goods and major isooctanol plants shipped a portion of their export orders, supply gradually tightened. Some downstream plants resumed or increased operations, while supply further contracted due to reduced output from Qilu's isooctanol facility. The impact of November's supply losses gradually materialized, showing signs of intensification. Compounded by factors like concentrated spot purchases by some downstream players in Shandong, the market's supply-demand imbalance became pronounced. Prices gradually strengthened, with gains expanding. By November 26, the average price of n-octanol in Shandong settled at 6,400 RMB/ton, up 600 RMB/ton from November 14, representing a 10.34% increase.
In early December, the hexanol market is expected to maintain its upward momentum. Short-term order shipments from hexanol plants remain concentrated, potentially prolonging supply tightness. However, supply conditions are projected to gradually ease as plant operating rates increase, capacity in East China and Shandong comes online, and downstream factories slow their restocking pace. Seasonal weakness in downstream consumption may again exert downward pressure on the market, while resistance to passing on high costs could rise.
Overall, with anticipated supply increases and weakening demand, the isooctanol market is expected to stabilize before gradually weakening. The market may gradually adjust downward from current highs throughout December, with prices likely hovering around 6,000-6,500 RMB/ton and the average price settling near 6,200 RMB/ton.
As an integrated internet platform providing benchmark prices, On December 3, the benchmark price of isooctanol SunSirs was 6733.33 RMB/ton, an increase of 2.54% compared with the beginning of the month (6566.67 RMB/ton).
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