The price of isooctanol increased significantly in September
On September 11th, the price of isooctanol was 9766.67 yuan/ton, a significant increase of 10.57% compared to the price of 8833.33 yuan/ton on September 1st. In early September, isooctanol fluctuated upwards, and the mainstream factory in Shandong has been rising since around 8800 at the beginning of the month. Currently, it is at a high level for the year, and the upward momentum is gradually weakening. The risk of high-level fluctuations and stagflation in the future market is relatively high.
The escalation of geopolitical games in the Middle East
In September, the escalation of the US Iran maritime conflict led to a decrease in navigation volume in the Strait of Hormuz and a surge in oil tanker insurance premiums; In early September, the Houthi armed offensive intensified, and on September 10th, they captured the Red Sea ports of Muha and Hanish Islands, strengthening their control over the Mandeb Strait. The market is concerned that both the Strait of Hormuz (the main channel for crude oil in the Persian Gulf) and the Strait of Mandeb (the Red Sea) are under pressure, leading to a surge in international crude oil prices. On September 11th, Oman took the lead in mediating, and on September 14th, the Iranian Foreign Minister and the foreign ministers of the six Gulf countries will meet in Salalah, Oman to discuss a temporary agreement on the passage of merchant ships in the Strait of Hormuz; A major easing signal led to a rapid decline in crude oil prices on the 11th.
The cost of propylene has significantly increased
On September 11th, the propylene price was 10051 yuan/ton, a fluctuating increase of 8.92% compared to the propylene price of 9227.67 yuan/ton on September 1st. The escalation of geopolitical conflicts in the Middle East led to a significant surge in crude oil prices in early September, with oil prices reaching the $100 mark and experiencing severe fluctuations; The formation of cost support for propylene and isooctanol, but the geopolitical premium can quickly retreat at any time, posing a great risk of high volatility. High level oscillation of raw material propylene+bottom support of crude oil, strong cost support, providing bottom support for isooctanol; However, there is limited room for a significant increase in propylene prices, and the driving force for further cost increases has weakened.
Supply side
The overall operating rate of the isooctanol industry is 70% -75%, lower than the usual level, and the supply expectation is tightened. In addition, Hualu Hengsheng has a maintenance plan in September, and mainstream large factories are controlling the quantity and accepting orders in stages, resulting in a shortage of spot circulation sources. The overall supply of isooctanol market was tight in September.
Demand side
Expectations for the peak season of “Golden September” include a slight increase in downstream DOP production compared to the previous period, a slight rebound in essential procurement, and follow-up on the price increase of isooctanol; However, the actual demand for PVC and plastic products at the terminal is relatively mild, not an explosive strong demand. Most of them are restocked on demand, and the willingness to stock up is not strong. Other downstream demand remains stable, with limited impact on the market. The overall demand for isooctanol is expected to rebound and increase.
Future prospects
Analysts believe that the high rise in crude oil prices, the maintenance of isooctanol units, and the expected rebound in demand during peak seasons have stimulated the rise in isooctanol prices from various sources. But the price of isooctanol has reached a high point for the year, and downstream consumers are resistant to the high price, with insufficient willingness to chase after it; In addition, due to the strong volatility of geopolitical news, there is a risk of a significant drop in oil prices at any time. Overall, there is a high probability of isooctanol rising in the future market, but the potential for a significant increase is limited. In mid to late September, isooctanol is likely to fluctuate at a high level, and caution should be exercised against the risk of a surge and a pullback. Focus on the risk of a significant pullback in crude oil prices.