Introduction: Since mid-June, the domestic isopropanol market has experienced an overall unilateral decline. The price trend has been primarily influenced by multiple factors including the collapse of cost support, persistently weak demand, and bearish market sentiment. Due to sluggish transactions, prices have fallen continuously with weak overall trading atmosphere. As of press time, the negotiated price range in the Jiangsu market is around 6000-6050 yuan/ton, a decline of 19.7% compared to the beginning of the month.

1. Collapse of Raw Material Cost Support

Looking at the raw material market trend, the feedstock acetone market has been on a downward trajectory since May, with the decline intensifying in June. This is mainly due to the continuous weakening of upstream pure benzene, the difficulty for crude oil gains to transmit downstream, and significantly weakened cost support. Combined with the high-temperature season pushing downstream into the traditional demand off-season, factories generally implement low-inventory, just-in-time procurement strategies, with a lackluster willingness for concentrated stockpiling, leading to a generally quiet overall trading market. Another raw material, propylene, shifted from a gradual decline to a rapid drop in mid-to-late June. Under the combined bearish pressures of insufficient cost support, increasing supply pressure, and weak downstream demand, it experienced consecutive significant price drops. Currently, propylene plant operating rates remain high, and the supply surplus is unlikely to reverse in the short term, limiting upward price potential. Overall, the dual raw materials have seen significant recent declines with no signs of stabilization, making it difficult to provide cost support for isopropanol. Production plants are experiencing weak new order transactions and show a strong inclination to offer discounts. The negative cycle of falling costs and falling prices in the market may persist in the short term.

2. Weak Demand, Loose Market Supply

In June, due to high production cost pressures, some plants made minor adjustments to their operating loads, leading to a slight decline in industry operating rates. According to statistics from Chempricehub, isopropanol output in June was 52,400 tons, a month-on-month decrease of 6.18%. However, given the high inventory levels from earlier periods and lackluster end-user demand, spot supply in the market remained relatively ample, with the overall supply pattern continuing to be loose. Constrained by weak downstream buying interest, actual order volumes remained limited, maintaining only small transactions for essential needs, resulting in a quiet trading atmosphere.

3. Exports Remained High in April-May, Expected to Weaken Later

In May, China's isopropanol export volume reached 23,550.75 tons, with an average export price of 1246.32 USD/ton. Export volume decreased by 19.79% month-on-month but increased by 129.74% year-on-year. Export data shows that China's isopropanol exports are primarily destined for Indonesia, India, etc., mainly through general trade and processing trade. The main export registration locations are Guangdong Province and Shanghai. Compared to last year, the year-on-year increase in isopropanol export volume is significant, primarily driven by a low base from last year and favorable domestic versus international price spreads. On one hand, the export base in the same period last year was only 10,200 tons due to overseas destocking cycles, which represents a historically low level, causing a sharp boost in the year-on-year data. On the other hand, during April-May, influenced by geopolitical conflicts, international isopropanol plants had limited output due to high costs, highlighting China's export advantages and creating significant arbitrage opportunities compared to the international market. Coupled with the traditional peak procurement season in Southeast Asia and increased restocking activity for essential needs, this led to a concentrated surge in export orders. However, as domestic isopropanol prices continue to decline, overseas customers increasingly adopt a "buy on rising, not on falling" mentality, leading to heightened wait-and-see sentiment and a slower pace of procurement. It is expected that isopropanol export volume will weaken in the future and will be unable to effectively drive the domestic supply-demand balance.

4. Market Outlook: Expected to Maintain Weak Consolidation

In summary, constrained by bearish factors such as cost collapse, loose supply, and weak demand, the isopropanol market is unlikely to improve in the short term. Although some plants have plans for shutdowns or catalyst changes, the impending startup of new production capacity, strong bearish sentiment among market participants, lack of confidence, combined with high early-stage inventory levels and the end-user demand off-season, are exacerbating the contradiction between supply and demand. It is expected that the domestic isopropanol market will continue to consolidate weakly in the short term, with close attention needed on signals of raw material price stabilization and the pace of phased downstream restocking.