The isopropyl alcohol market still faces overcapacity in 2021_Industrial Additives

On the first day of 2021, the domestic acetone market price plummeted to a low of 5,050 yuan/ton. Although it could recover to 5,250 yuan/ton on the same day, it still exceeded market expectations. Affected by the decline in acetone, isopropyl alcohol also started lower this year. As of the close of the market on January 6, the market in Shandong fell to 6,650 yuan/ton, and in Jiangsu and Zhejiang to about 6,950 yuan/ton.

China’s demand for isopropyl alcohol has declined in the past two years, and the in-depth reforms of many industries in our country have caused some downstream manufacturing industries of isopropyl alcohol to be transferred. However, demand in Southeast Asia maintains strong growth, and China’s isopropyl alcohol will also enter an era of dependence on exports. Solvents are the largest consumer area of ​​isopropyl alcohol. In the solvent field, China’s isopropyl alcohol is mainly used in the ink, coating and pharmaceutical industries, and its consumption accounts for more than 70% of the total consumption of isopropyl alcohol.

Dual-process competition in the isopropyl alcohol market is fierce

At the end of the year and the beginning of the year, the shipment volume of factories in Shandong Dominant, inventory is low, and operating rates have also increased due to significant cost reductions. Shipments from northern propylene process plants are slow, and there is room for further price reductions to ease sales pressure.

The price of propylene in the Northeast region has increased slightly. The production cost of isopropyl alcohol has reached more than 6,200 yuan/ton. The ex-factory price of Northeast factories is between 6 and 6,500 yuan/ton, and sales pressure is high. The ex-factory price in Shandong is between 6,600-6,800 yuan/ton. Referring to the recent price of acetone, the cost is around 6,600 yuan/ton, which is basically on the cost line. The profit of the dual process is slim.

The acetone method has become the mainstream production process of isopropyl alcohol in my country, accounting for about 60%

Since 2010, my country’s isopropyl alcohol production capacity has continued to increase, but demand follow-up is limited and production capacity Surpluses emerged quickly. Data shows that the total domestic isopropyl alcohol production capacity in 2019 is approximately 1 million tons/year, with the acetone hydrogenation production process being the main one. In 2020, new devices will still be put into operation in the domestic isopropyl alcohol industry, with a total new production capacity of 200,000 tons. The total production capacity will reach about 1.2 million tons, a year-on-year increase of about 20%. Domestic isopropyl alcohol supply has reached a new level.

Insufficient domestic demand is mainly driven by exports

With the outbreak of COVID-19 around the world in 2020, foreign demand for disinfectant products – isopropyl alcohol has increased significantly, and my country’s isopropyl alcohol exports have emerged. With both volume and price rising, the domestic isopropyl alcohol market has been growing rapidly, driven by a surge in export volume and cost-end support. Entering 2021, the international epidemic continues to spread, and the price of isopropyl alcohol in Europe continues to fall. Although the price of isopropyl alcohol in my country continues to fall, there is no obvious price advantage. Compared with the Americas and Southeast Asia, exports are expected. After mid-January, my country’s domestic demand has no support and relies more on foreign trade orders for support.

With the development of downstream manufacturing in Southeast Asia, China’s isopropyl alcohol market demand has declined, and China’s isopropyl alcohol is mainly expanding its foreign trade market. Judging from the current epidemic situation, there is a high probability that some downstream factory workers will return home early, and the downstream will not carry too much inventory. As the Spring Festival approaches, considering the traffic control at the end of the month, the downstream stocking period may be slightly advanced, especially in the current isopropyl The price of alcohol has bottomed out, and there are many rebounds in the domestic market.

Source: Buy Chemical Plastics Research Institute