Costs Dropped Sharply, and Isooctanol Prices Fell

According to the commodity market analysis system of SunSirs, the price of isooctanol stood at 7,900 RMB/ton on June 23. Compared to the price of 7,966.67 RMB/ton on June 1, the price saw an initial rise followed by a decline, resulting in a net drop of 0.84%; compared to the price of 8,266.67 RMB/ton on June 12, it fell by 4.44%. With the easing of geopolitical tensions between the US and Iran and the dissipation of the risk premium in international crude oil, propylene prices dropped sharply; this weakened cost support to isooctanol, causing its price to retreat after an initial surge.

Propylene costs had decreased

According to the commodity market analysis system of SunSirs, the quoted price to propylene on June 23 was 7,684.33 RMB/ton, marking a significant drop of 13.02% from the 8,834.33 RMB/ton quoted on June 12. As geopolitical tensions between the U.S. and Iran eased and the risk premium to international crude oil dissipated, propylene prices fell sharply, intensifying downward pressure on isooctanol prices.

Ample Supply of isooctanol

Approximately 1.14 million tonnes per year of new capacity is projected to come online by 2026, bringing the total supply to an estimated 3.73 million tonnes. With several new units gradually commencing production in June, operating rates at isooctanol vegetation saw a slight decline; however, supply remains ample, weakening the support to price increases.

Sluggish Downstream Demand

The downstream plasticizer sector is in its traditional off-season, with operating rates dropping to around 50%. Demand from end-consumption sectors—such as real estate and construction materials—has shown no substantial improvement; purchasing is driven primarily by essential needs, and there is significant resistance to high-priced raw materials. Downstream factories are buying only to immediate consumption and shying away from high prices, resulting in few high-priced transactions and forcing traders to reduce prices to offload inventory.

Export window narrowed

With the recovery of Middle East crude oil supplies and an increase in imported resources in Southeast Asia, the cost-effectiveness of exporting domestically produced isooctanol has declined, leading to reduce export expectations; as external demand is unable to absorb the domestic supply surplus, domestic prices face further downward pressure.

Market outlook

Analysts at SunSirs Octanol Product Division assess the market as follows: regarding costs, crude oil and propylene prices remain weak, making a strong rebound in costs unlikely; on the supply side, new capacity continues to come online and operating rates remain relatively high, leaving little relief to inventory pressure; regarding demand, July remains a traditional off-season to downstream sectors, so a rapid recovery in demand is unlikely. Looking ahead, the immediate outlook to isooctanol (octanol) is characterized by range-bound trading with a bearish bias; the possible to a rebound is limited, with a key resistance zone at 8,100–8,200 RMB/ton and support at 7,700–7,800 RMB/ton.