On October 27th, the price of isooctanol was 10033.33 yuan/ton, a fluctuating increase of 10.05% compared to the price of 9116.67 yuan/ton on October 1st. Cost push pushed isooctanol unilaterally up to a new high for the year in October. From the holiday to the 10th and 14th, the price of propylene surged, and the cost of isooctanol continued to rise. From the 14th to the 24th, the price of propylene fell, the support for the rise of isooctanol weakened, and the price of isooctanol stabilized; From the 24th to the 27th, the price of propylene rose again, and the price of isooctanol reached a new high.
The price of raw material propylene fluctuates and rises
On October 27th, the propylene price was 10801 yuan/ton, a fluctuating increase of 11.26% compared to the propylene price of 9707.67 yuan/ton on October 1st. The escalation of geopolitical conflicts in the Middle East has led to a significant increase in crude oil prices in October, which has provided a cost floor for propylene and isooctanol, causing a volatile rise in propylene prices. The rise in costs has led to a significant increase in the price of isooctanol.
Supply side
In October, the overall operating rate of the isooctanol industry was 68% -73%. During the National Day holiday, the operating rate decreased significantly, but slowly resumed after the holiday. During the upward trend, the market briefly traded “overall tight spot supply”; With the increase in the operating rate of isooctanol equipment, the supply of isooctanol is stable. ‘Tightness’ is more of a short-term mismatch based on regional and rhythmic factors, rather than a global shortage. Once the price reaches the downstream tolerance limit and the procurement pace slows down, the support from the supply side will quickly weaken, and the continuous rise of isooctanol will lack sufficient support.
Demand side: Low downstream operating rate, hidden concerns about high price acceptance
The operating rate of DOP devices in October was 45-57%, which is at a medium to low level. The downstream operating rate is also low, and there is insufficient demand follow-up. The increase in DOP is more cost driven than order driven. Plasticizer companies maintain low production and on-demand procurement at high raw material prices, and there is a clear upper limit to their ability to accept further increases in isooctanol. When the price of isooctanol approaches the 10000 yuan mark, downstream resistance will become a hard constraint for the continued upward trend of isooctanol prices.
Outlook for the coming period
Analysts believe that the price of isooctanol is at a new high for the year, but the upward potential is very limited, and there is a high risk of price decline in the future. The rise in isooctanol in October was almost entirely driven by costs, and the demand side increment was insufficient, and the supply side operating rate did not constitute a hard shortage. In the future, the risk return ratio for continuing to chase higher prices in the short term is clearly unfavorable. The expected high volatility of isooctanol prices is weak, and the center of gravity is prone to a slight decline.