How does the 1-octanol market cycle affect producer profitability and investment decisions?

How does the 1-octanol market cycle affect producer profitability and investment decisions?
The 1-octanol market has experienced violent boom-bust cycles. From late 2020 to mid-2021, prices surged to a record 18,650 yuan per tonne with single-tonne profits exceeding 10,000 yuan, driven by supply-demand mismatches and production curbs. But by August 2022, prices halved, pushing the industry toward losses. This volatility reflects the product's tight linkage to both propylene costs and downstream plasticizer demand. The 2024 landscape shows a clear divide: integrated coal-chemical and petrochemical giants like Luxi and Huachang maintain 25-28% gross margins due to scale and feedstock advantages, while smaller producers face margins under 5%. This has accelerated industry consolidation, with new investments concentrated among top players. The recent wave of capacity additions—including Hebei Haihang's 800,000-tonne project—suggests the market is entering another oversupply phase, which could compress margins for less efficient operators.