[Introduction] After the May Day holiday, the domestic isopropanol market entered a continuous downward trend, with the negotiated price in the Jiangsu market dropping from 8,650 yuan/ton before the holiday to 8,000 yuan/ton, a decline of 7.51%. However, due to limited price drops of the two raw materials, production factories face significant cost pressure. Some enterprises relying on externally purchased raw materials have seen losses deepen, with many planning to reduce loads or halt production. Supply-side support has strengthened, leading to a slight rebound from the market bottom. Yet, actual transaction volumes remain generally modest.

I. Weak Demand Leads to Continuous Market Decline

After the May Day holiday, the price of raw material acetone softened, weakening cost support for isopropanol production plants. Combined with poor new order transactions, many proactively lowered quotes to stimulate deals. End-user demand remained weak, with overall purchasing intent subdued. Holders increased their willingness to sell, and negotiation space loosened, driving the market transaction center downward continuously. Mid-month, although raw material acetone prices edged up slightly, the concentrated arrival of waterborne cargo in East China significantly increased spot market supply pressure. Holders still inclined to offer discounts, causing the market center to keep declining. Some production enterprises using externally purchased raw materials faced high cost pressure and proactively reduced loads or cut output. This strengthened supply-side support, halting the market's decline and prompting a slight rebound. However, as end-user demand has not shown substantial improvement, actual transaction volumes remain insufficient, and supply-demand sides will continue to contend.

II. Relaxed Supply Pattern Worsens Market Supply-Demand Imbalance

Before the May Day holiday, domestic isopropanol industry operating rates remained stable, with capacity utilization around 69%. After the holiday, as isopropanol market prices kept falling, cost pressures became apparent for some plants using externally purchased raw materials. Some planned to halt or reduce loads, lowering industry operating rates to around 64%. However, due to relatively ample port inventories, the market supply side remained relaxed, providing no significant boost to prices.

III. Divergent Raw Material Trends Lead to Profit Differentiation Between Two Processes

From a profitability perspective, profit trends for the two isopropanol processes have diverged. This is mainly because the price trends of the two raw materials differ, causing varying cost pressures for production plants. Acetone price fluctuations have narrowed, while propylene, the other raw material, has seen notable price declines. Acetone-based isopropanol plants face greater cost pressure, with losses deepening. Profits for propylene-based plants, though declining, remain in positive territory.

IV. Ongoing Supply-Demand Contest, Market Expected to Maintain Weak Range-Bound Fluctuations

The isopropanol market is expected to maintain weak range-bound fluctuations in the coming period, with limited price movement and intensifying supply-demand competition. On the supply side, cost pressures are prominent, and some acetone-based plants are expected to halt or reduce loads, leading to a significant drop in overall industry operation. However, considering the high current spot inventory levels at ports and production areas, the overall market supply pattern remains relaxed, with supply-side positives offset by high inventories. On the demand side, downstream end-users are cautious, with low purchasing enthusiasm, mostly maintaining small-lot procurements for essential needs. The overall market trading atmosphere is unlikely to improve. Export market inquiries are generally lukewarm, offering limited pull for the domestic market. On the cost side, raw material prices remain firm. Under the logic of cost support, factories are not inclined to significantly cut prices, providing a floor for market prices. In summary, the market is caught between bullish and bearish factors: weak demand caps upside, while firm costs limit downside. The isopropanol market is expected to continue in a weak consolidation pattern, with difficulty rising or falling significantly. It is recommended that industry participants closely monitor price changes of raw material acetone and substantive follow-up in downstream demand.