Introduction:
Driven by sluggish downstream demand, hindered n-butanol shipment, and rising inventories, the market's oversupply situation has intensified. Market prices have continuously declined, yet there are no signs of improvement in transaction activity.

1. N-Butanol Price Continues to Decline

Domestic n-butanol market prices maintain a downward trend. The overall condition of downstream end-users has shown no signs of improvement. Due to severe margin inversion for some downstream sectors, multiple downstream production enterprises have voluntarily halted operations or reduced operating rates, decreasing their consumption of n-butanol. Market buyers across the supply chain mainly purchase only on a need-to basis at lower prices, showing some resistance to current price levels. Overall purchasing enthusiasm is low, market transaction volumes have shrunk, and the transaction price center continues to decline. Meanwhile, production plants face difficulties in sales, with inventories growing noticeably, increasing sales pressure. To control inventory levels, plants have successively cut product quotations to stimulate sales, but results have not met expectations. Despite some plant shutdowns for maintenance, the industry's sentiment is largely wait-and-see, and market trading remains persistently subdued.

Table 1: Domestic N-Butanol Main Regional Market Prices (CNY/tonne)

| Product | Region | May 8 | May 29 | Change | Change (%) |
|---------|--------|-------|--------|--------|------------|
| N-Butanol | Shandong | 7700 | 6785 | -915 | -11.88% |
| | East China | 7850 | 6850 | -1000 | -12.74% |
| | South China | 7950 | 6775 | -1175 | -14.78% |
| | Henan | 7750 | 7100 | -650 | -8.39% |

2. Oversupply Situation Worsens for N-Butanol

In early May, domestic n-butanol plants operated at relatively high load levels. The recovery of units from maintenance in April, coupled with product switching to n-butanol due to severe margin inversion, gradually increased market supply. As market prices continued to decline, n-butanol also entered a margin inversion phase. In mid-to-late May, the number of units under maintenance or reducing output increased, leading to a slight decline in market supply, but overall supply remained high. Severe losses among major downstream n-butanol users led to an increasing number of downstream plant shutdowns or production cuts, significantly lowering downstream operating rates and thus reducing downstream demand for n-butanol. This caused the domestic n-butanol market's oversupply situation to intensify further.

3. Prices Decline Continuously; Margins Enter Inversion Stage

Both feedstock propylene and n-butanol market prices fell simultaneously. Propylene declined due to crude oil influences, but its overall decrease was smaller than that of n-butanol. N-butanol prices plunged more sharply due to supply-demand imbalance and oversupply. Consequently, n-butanol margins decreased rapidly, entering an inversion stage. As of May 29, the profit for n-butanol in the Shandong region was -456 CNY/tonne.

Table 2: N-Butanol, Feedstock, and Cost/Profit Data Comparison (CNY/tonne)

| Product | Region | May 8 | May 29 | Change | Change (%) |
|---------|--------|-------|--------|--------|------------|
| N-Butanol | Shandong | 7700 | 6785 | -915 | -11.88% |
| Propylene | Shandong | 9540 | 9110 | -430 | -4.51% |
| Cost | Shandong | 7508 | 7241 | -267 | -3.56% |
| Profit | Shandong | 192 | -456 | -648 | -3375% |

4. Future Outlook

From the current perspective, the domestic n-butanol market price is expected to continue its downward trend in the future. On the supply side, previously shut units are gradually restarting and resuming production. Although temporary output reductions exist locally within the industry, overall production recovery is clearly increasing. Additionally, new capacity units are starting up and coming into production, so total market supply will steadily rise. On the demand side, performance remains persistently weak. The operation of major downstream industries has entered the traditional off-season. End-market demand has not improved, and downstream enterprises' purchasing atmosphere remains thin, with product prices continuing to decline. Furthermore, some major downstream companies, having been under losses for a long time, plan to shut down or cut production, so downstream operating rates will further decline. Feedstock propylene prices fluctuate within a narrow range, offering limited cost support, and its transmission impact on the n-butanol market continues to weaken. Overall, it is expected that the domestic n-butanol market's oversupply pattern will worsen further, and market prices still have room to decline.