I. Review of n-butanol price trends in 2025

According to data from SunSirs' monitoring system, the domestic n-butanol market in Shandong province experienced overall volatile downward trends throughout 2025. On January 1, 2025, the reference price for n-butanol in Shandong was 7,116 RMB/ton, while on December 31, 2025, the reference price was 5,633 RMB/ton, representing a year-on-year decrease of 20.84%.

According to data monitoring charts from SunSirs, the n-butanol market experienced a "high-to-low trend with a weak correction at the end of the year" during January-December 2025.

From January to June 2025, the n-butanol market fluctuated downwards, with a decline of nearly 9% over the six-month period.

At the beginning of the year, the n-butanol market fluctuated within a range, with prices hovering around 7,100-7,200 RMB/ton. Starting in March, the n-butanol market experienced a sharp decline.  From May to June, the market showed a slight recovery, but lacked momentum. In the first half of 2025, the price of n-butanol fell by 8.9%.

From July to December 2025, the price of n-butanol experienced a significant decline, with the lowest price approaching 5,000 RMB/ton.

In the second half of 2025, the n-butanol market continued its downward trend. On August 8th, after falling below the 6,000 RMB/ton mark, the price of n-butanol saw a slight rebound, but the support was insufficient, and the market fell again. The traditional "golden September and silver October" period did not boost the market, and the downward trend continued. On November 20th, n-butanol fell to its lowest point of the year, with the price approaching the 5,000 RMB/ton mark, reaching approximately 5,066 RMB/ton, representing a year-to-date decline of over 21%. Subsequently, the market rebounded slightly, but the gains were limited, and the annual market price range was 5,150-5,850 RMB/ton.

II. Analysis of Factors Influencing the n-Butanol Market in 2025

Raw Materials and Cost Side: Fluctuations in propylene prices are the core driving factor. In 2025, the market price of propylene fluctuated around 7,100-5,900 RMB/ton. From the end of the year to the beginning of the next year, the decline in propylene prices was significant, and the price drop accelerated in October-November, directly leading to a weakening of cost support for n-butanol, and the market price fell to its lowest point of the year, lacking effective support.

Supply and Demand: Throughout 2025, the n-butanol market showed a "supply exceeding demand" trend. Overall production of n-butanol remained at a relatively high level, resulting in ample supply. In the first half of the year, demand from downstream industries such as coatings and plasticizers was strong, providing some support for prices, limiting the overall price decline of n-butanol. However, in the second half of the year, especially in the fourth quarter, downstream industries entered their off-season, leading to reduced demand as companies work through existing inventory. Purchasing activity slowed down, new orders was cautious, and inquiries focused on lower-priced products.  The demand-side support gradually weakened, resulting in a significant drop in market prices.

Policy and Technology: The "Implementation Plan for Carbon Peaking in the Petrochemical Industry" imposed constraints on coal-based facilities, increasing carbon costs. Some high-carbon production capacity was forced to reduce output, while green technology facilities maintained stable supply due to policy advantages, impacting the market supply and demand structure.

III. Outlook and Forecast for the n-Butanol Industry in 2026

Production capacity forecast: Structural expansion continues, and market concentration further increases.

From 2018 to 2023, China's n-butanol production capacity maintained stable growth. In 2024, the growth rate of new n-butanol capacity accelerated, and new capacity additions continued in 2025.  In 2025, the domestic n-butanol industry exhibited a parallel trend of "structural expansion + elimination of inefficient capacity," with a total capacity of approximately 4.03 million tons per year, representing a 10.10% increase compared to 2024.

In 2026, China is expected to see the release of new production capacity for n-butanol and octanol, involving companies such as Fujian Zhongjing Petrochemical (304,000 tons of n-butanol), Taizhou Xinpu Chemical (236,000 tons of n-butanol), and Guangxi Huayi (320,000 tons of butanol and octanol).

In terms of regional distribution, by 2025, East China remained the core production area, with Shandong and Jiangsu accounting for over 65% of production capacity due to their integrated infrastructure and port advantages; South China and the western regions had relatively smaller shares of production capacity.

Supply and demand forecast: Demand growth is outpacing supply, leading to structural shortages.

Supply side: In 2026, the overall supply of n-butanol is expected to increase, but due to stricter environmental regulations, some small and medium-sized production facilities may face temporary production restrictions, impacting local supply in the short term. Coupled with carbon cost pressures and the impact of operating rates at coal-based facilities, the capacity utilization rate in 2026 is expected to be around 86%, resulting in moderate and controllable overall supply growth.

Demand Side: Butanol demand is also expected to increase in 2026. In traditional sectors, the demand for water-based coatings and plasticizers will provide stable market support; demand in emerging sectors will experience explosive growth. The demand for butanol in electric vehicle battery materials and biodegradable plastics will grow increasingly rapidly, and the growth in demand for electronic-grade butanol used in semiconductors will also become more apparent. Emerging sectors will become the core growth driver for butanol demand in 2026. Overall, demand growth in 2026 will outpace supply growth, and the industry will shift from "supply-demand balance" to a "structurally tight balance," with potential localized supply shortages during the peak demand seasons of the second and third quarters.Butanol demand is also expected to increase in 2026. In traditional sectors, the demand for water-based coatings and plasticizers will provide stable market support; demand in emerging sectors will experience explosive growth. The demand for butanol in electric vehicle battery materials and biodegradable plastics will grow increasingly rapidly, and the growth in demand for electronic-grade butanol used in semiconductors will also become more apparent. Emerging sectors will become the core growth driver for butanol demand in 2026. Overall, demand growth in 2026 will outpace supply growth, and the industry will shift from "supply-demand balance" to a "structurally tight balance," with potential localized supply shortages during the peak demand seasons of the second and third quarters.

Production forecast: Production will increase in line with supply and demand.

Based on the continuous expansion of production capacity on the supply side and the rapid growth of demand in emerging fields, China's n-butanol production is expected to increase slightly in 2026.  Looking at the past few years, the overall domestic production of n-butanol has fluctuated within a range. In 2024, a concentrated release of n-butanol production capacity boosted overall output. In 2025, new production capacity continud to be added to the market, and it is estimated that n-butanol production would reac approximately 2.97 million tons. It is projected that in 2026, with increased capacity and driven by demand, n-butanol production is expected to exceed 3.3 million tons.

Export Forecast: The export market is expected to expand further.

In recent years, China's n-butanol exports have remained consistently low, not exceeding 30,000 tons, and have been declining since 2022, reaching only 3,700 tons in 2023, a year-on-year decrease of 83.33%. While n-butanol exports increased in 2024, they decreased again in 2025, with exports reaching 11,700 tons from January to October. This decline indicates overall weaker demand. Currently, demand is strong in Southeast Asian and Central and Eastern European markets such as Vietnam, India, and Turkey. Therefore, China's n-butanol exports are expected to grow again in 2026.

Price trend forecast: Initial decline followed by a rise, with the central price level shifting upwards.

Based on data from SunSirs and industry fundamentals, it is projected that the price of n-butanol in 2026 will follow a pattern of "bottoming out in the first quarter, rising in the second quarter, and operating at a high level in the second half of the year." The average annual price is expected to increase by 5%-8% compared to 2025, with a core operating range of 5,400-6,200 RMB/ton.

• First Quarter: The weak trend from the end of 2025 continued, with downstream demand in its off-season and sluggish market activity. Prices bottomed out in the 5,400-5,600 RMB/ton range, mainly due to insufficient pre-Chinese New Year stocking demand and ample supply.

• Second quarter: As downstream industries such as coatings and plastics enter their peak production season, coupled with the surge in demand from the new energy materials sector, demand-side support will strengthen. At the same time, propylene prices are expected to stabilize and rebound, driving the price of n-butanol to break through 5,800 RMB/ton and move towards the 6,000 RMB/ton range.

• Second half of the year: A tight supply-demand balance will become evident, leading to increased premiums for environmentally friendly processes. , Coupled with growing export demand, prices will remain at a high level of 5,900-6,200 RMB/ton. If there are disruptions to propylene supply or extreme weather affecting logistics, prices could exceed 6,500 RMB/ton.

IV. Summary

In 2025, the n-butanol industry experienced fluctuations driven by capacity optimization, demand upgrades, and policy guidance. Prices was weak and subject to periodic adjustments due to supply and demand dynamics and raw material price volatility. In 2026, the industry will enter a "high-quality growth" phase, with increased capacity concentration, upgraded demand structure, and green transformation becoming core themes. A tight supply-demand balance will drive prices upward, and emerging sectors and export markets will become key growth engines. Companies need to focus on upgrading green processes, developing high-end products, and optimizing regional layouts to cope with market fluctuations and policy changes, and seize the development opportunities brought about by the industry transformation.

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