From the data monitoring system of Shengyi Society, it can be seen that in 2024, the domestic n-butanol market in Shandong region fluctuated with ups and downs, and the focus continued to move towards lower levels. On January 1, 2024, the reference price of n-butanol in Shandong region was 8700 yuan/ton, and on December 26, 2024, the reference price of n-butanol in Shandong region was 7183 yuan/ton, a decrease of 17.43% during the year.
From the data monitoring chart of Shengyi Society, it can be seen that from January to December 2024, the n-butanol market experienced a trend of “one rise and two falls”. Among them, one rise occurred in early May June. The two declines occurred in February March and late June to early September. Next, we will analyze the factors behind the “one rise and two falls” market trend.
In February and March, after the Spring Festival, the n-butanol market was weak and fell. The overall operating load of the downstream industry of n-butanol is not high, and the recovery of demand in the downstream market is not as expected. The general shipment of n-butanol factories is not smooth, and the pressure on the supply side is accumulating. The slow transmission of supply and demand is dragging down the n-butanol market price from bottom to top, and the market decline is relatively significant. On March 25th, the reference price for n-butanol market in Shandong was 7733 yuan/ton, a decrease of 1083 yuan/ton or 12.29% from the price of 8816 yuan/ton on February 1st.
The market for n-butanol rose in May and June. In early May, the government issued a policy to impose anti-dumping duties on imported n-butanol, and n-butanol imported from Taiwan was also affected by the anti-dumping duties, resulting in an overall increase in import costs. Taiwan accounts for three layers of domestically imported n-butanol. Therefore, due to the policy’s impact, the import volume of n-butanol has decreased, and the supply in the current market is tight. Under the policy’s push, n-butanol factories have raised prices and offered quotes, causing market prices to skyrocket and reach a high point of 9200 yuan/ton this year.
From late June to mid September, negative factors suppressed the n-butanol market, causing a sharp decline. Entering late June, the downstream industry of n-butanol has gradually entered the traditional off-season. Downstream users have weakened their purchasing power for raw material n-butanol, and the demand side of n-butanol has shown weakness. The tight supply situation in the early stage has been alleviated. In addition, with the expectation of new equipment being put into operation in some regions, the supply expectation in the market has increased, and the market’s wait-and-see sentiment has become stronger, leading to an increased bearish attitude towards the market. Under the pressure of negative factors, the n-butanol market continues to decline. On September 17th, the reference price of n-butanol in the domestic Shandong region was 6666 yuan/ton. Compared with the n-butanol price of 9200 yuan/ton on June 10th, it decreased by 2500 yuan/ton, a decrease of 27.54%.
At the end of the year (November December), there was a slight recovery and operation in the n-butanol market. In November, some facilities in the n-butanol plant were temporarily shut down, leading to a decrease in supply expectations and supporting the upward trend of the market. In December, some downstream users began stocking up before the holiday, which boosted the demand for n-butanol in the market. However, due to the weak post holiday market performance of n-butanol during the 2023-2024 Spring Festival, downstream users are cautious in their overall stocking mentality and may worry about returning after the holiday, causing the market to repeat the same mistakes. Therefore, in December, the overall upward trend of the n-butanol market was limited.
It can be seen that the main influencing factors of the two significant declines in the n-butanol market are related to supply and demand performance. The rise in market prices comes from policy changes and the tight supply market, while the sudden decline in market prices is due to the lack of timely feedback from downstream demand, poor performance of terminal demand, and difficulty in supporting high market levels, resulting in a gradual decline in market prices. So let’s take a closer look at the data on supply and demand, and what impact it will have on the market in the new year.
What will be the market trend of n-butanol in 2025?
Introduction to n-butanol
N-butanol, also known as 1-butanol, is a colorless and transparent liquid organic compound with a pungent odor. It can form an azeotrope with water. N-butanol is an important fine chemical product. Its main production processes include fermentation, acetaldehyde condensation, and propylene carbonylation synthesis. Its application areas are mainly used for the production of butyl acrylate, butyl acetate, DBP (dibutyl phthalate), ethylene glycol butyl ether and other products.
Production process of n-butanol
The main production processes of n-butanol include fermentation, acetaldehyde condensation, and propylene carbonylation synthesis. Among them, fermentation and alcohol condensation methods have not been widely used due to their complex preparation and difficult availability of raw materials. Currently, the propylene carbonylation synthesis method has become the most important production method for n-butanol due to its easy availability of raw materials, relatively reduced carbonylation process pressure, increased ratio of n-butanol to isobutanol products, and the ability to co produce or specialize in the production of 2-ethylhexanol.
N-butanol industry chain
The upstream of the n-butanol industry chain includes raw materials such as propylene; The midstream is the production and supply of n-butanol, and the mainstream production process is carbonyl synthesis; Downstream is the application field, which is an important fine chemical product that can be used to produce products such as butyl acrylate, butyl acetate, DBP (dibutyl phthalate), ethylene glycol butyl ether, etc.
Downstream consumption field of n-butanol
In recent years, the downstream consumption structure of n-butanol in China has been relatively stable. The proportion of downstream consumption of n-butanol remains relatively stable in 2024, with over 80% of n-butanol used for the production of butyl acrylate, butyl acetate, and DBP (dibutyl phthalate). Among them, the consumption of butyl acrylate accounts for 55.3%, butyl acetate accounts for 17.3%, and DBP accounts for 13%.
In terms of production capacity
The distribution of concentrated release areas for the newly added production capacity of n-butanol from 2024 to 2025 is relatively concentrated
From 2018 to 2020, China’s n-butanol production capacity remained at 2.72 million tons. From 2021 to 2023, the net increase in production capacity was only 400000 tons. In 2024, China will release new n-butanol production capacity, and the growth rate of production capacity will accelerate. The newly added production capacity is mainly concentrated in the East China region, where spot supply has increased. The main production capacity involved is 3.665 million tons, with a growth rate of 17.28% compared to 2023.
In addition, there are several butanol and octanol units in Chinese Mainland that can switch production as needed. Therefore, whether the existing octanol units will be converted to n-butanol will also have a greater impact on the market production when more new octanol capacity is put into production.
From a regional distribution perspective, currently, the production capacity of n-butanol in China is relatively concentrated, with the East China region accounting for the largest proportion of production capacity, exceeding 60%. Among them, Shandong Province has the largest production capacity, accounting for about 33% of the total production capacity, followed by the Northwest and South China regions, accounting for 8.6% and 7.3% respectively.
From the perspective of production enterprises, the production capacity distribution of domestic n-butanol production enterprises has changed in 2024. Although Luxi Chemical’s 410000 ton n-butanol production capacity still ranks first, it is only 10000 tons behind the second ranked satellite chemical’s 400000 ton production capacity. Huachang Chemical’s expanded 320000 ton n-butanol production capacity ranks third, with a total production capacity of 1.13 million tons, accounting for 30.8%. Wanhua Chemical’s 300000 tons and Yangzi BASF’s 275000 tons ranked fourth and fifth respectively.
At present, there are about 21 domestic n-butanol production enterprises with a total production capacity of approximately 3.665 million tons.
In 2025, it is expected that new production capacity will continue to be released in China’s n-butanol and octanol market, involving enterprises such as Guangxi Huayi’s 320000 ton n-butanol and octanol plant, Jineng Technology’s 500000 ton n-butanol and octanol plant, Wanhua Chemical’s 250000 ton butanol plant, BASF’s 150000 ton butanol plant, and 350000 ton octanol plant, with a total capacity increase of 1.57 million tons.
Supply of n-butanol
Market supply continues to increase in 2025
The continued release of production capacity also indicates that by 2025, the overall supply of n-butanol in the domestic market will continue to increase, especially in the East China region, where the overall supply performance of n-butanol market will continue to be mainly loose. However, in recent years, due to factors such as carbon neutrality and dual control of energy consumption, there may be some uncertainty in the production time of some new projects, so further observation is needed.
Demand for n-butanol
In 2025, the demand side will increase synchronously, but the growth rate may not be as fast as the supply side
The downstream demand for n-butanol in 2024 is average, and the growth rate of downstream production capacity is much lower than that of n-butanol itself. The overall growth of downstream demand is limited. Entering 2025, this situation may continue to exist. Currently, the downstream production capacity of butyl acrylate is already in a surplus state. Although there will still be new production capacity added in 2025, the overall production capacity will be much lower than that of n-butanol. In addition, currently, the capacity utilization rate of downstream butyl ester and plasticizer production is around 5-6 layers, which is relatively low. Therefore, the game between downstream demand and raw material supply will be more obvious in 2025.
In terms of output
From the supply side, in recent years, the overall production of n-butanol in China has not fluctuated much. In 2024, the concentrated release of n-butanol production capacity will drive the overall production increase. However, from May to July, many regions in China shut down for maintenance, coupled with a large amount of new production capacity, the overall capacity utilization rate has narrowly increased to around 75%. According to calculations, the production of n-butanol in China will be approximately 2.74 million tons in 2024.
In terms of consumption volume
From the perspective of demand, the consumption of n-butanol in China has decreased and increased in recent years. In 2020, under the impact of public health safety incidents, downstream and terminal demand decreased, and downstream butyl acrylate export orders decreased. In 2021, driven by the export of downstream butyl acrylate, the consumption of n-butanol increased. In 2022, due to the global economic downturn, the consumption of n-butanol decreased again. In 2023 and 2024, the concentrated release of downstream butyl acrylate production capacity will drive an increase in the consumption of end plasticizers in the market. In 2024, the consumption of n-butanol is approximately 2.845 million tons.
In terms of imports
The import volume of n-butanol will continue to be low in 2025
China is a net importer of n-butanol, with imports consistently exceeding exports in recent years. Data shows that the import volume of n-butanol in China has been increasing year by year from 2018 to 2020, reaching 272200 tons in 2020; In 2021, due to its increased production, the import volume declined to 130900 tons; After 2022, its import volume showed an increasing trend, reaching 189000 tons in 2023, a year-on-year increase of 18.72%.
On May 31, 2024, the State Council Tariff Commission issued a notice on suspending tariff reductions for some products (second batch) under the Cross Strait Economic Cooperation Framework Agreement. Starting from June 15th, the application of the agreed tax rates under the Cross Strait Economic Cooperation Framework Agreement will be suspended for 134 imported products, including lubricating base oils and n-butanol, originating from Taiwan, and will be implemented in accordance with current relevant regulations.
This means that Chinese Mainland will levy tariffs and anti-dumping duties simultaneously when importing n-butanol from Taiwan. Taking the n-butanol source of Formosa Plastics Group as an example, its anti-dumping tax rate is 6%, and after the resumption of the 5.5% tariff, the comprehensive import tax rate will reach 11.83%. After this adjustment, the tax rate for n-butanol originating from Taiwan has significantly increased, and the import cost will rise.
Therefore, in 2024, the overall import volume of n-butanol in China will be reduced. According to customs data, from January to November 2024, the import volume of n-butanol was 122000 tons, a year-on-year decrease of 35%.
It is expected that by 2025, the import volume of n-butanol in China will continue to decrease without increasing. Due to the continuous expansion of n-butanol production capacity in the past two years, the domestic production capacity of n-butanol has reached the level that meets domestic demand. In addition, the reform of import tariffs has led to a reduction in profits from importing n-butanol. Therefore, in 2025, the import volume of n-butanol will still be at a low level in recent years.
In terms of exports
The export of n-butanol is expected to continue to increase in 2025
In recent years, the export volume of n-butanol in China has remained small, not exceeding 30000 tons, and has been declining since 2022, with only 3700 tons in 2023, a year-on-year decrease of 83.33%. In 2024, the export volume of n-butanol in China has increased. According to customs data, from January to November 2024, the export volume of n-butanol was 16400 tons, a year-on-year increase of 325% compared to 2023. The significant increase in n-butanol export volume also reflects the changing market pattern behind the gradual growth of n-butanol production capacity in China.
It is expected that by 2025, the export volume of n-butanol in China will continue to increase. After the expansion of domestic n-butanol production capacity, the overall market supply will increase, and the supply will transition to the surplus stage. Therefore, it is expected that domestic exports may have a slight increase.
Summary:
In 2024, the performance of China’s real estate market is relatively weak, and the market demand for home appliances and automotive industries is also average. The overall demand for n-butanol and ester products is average.
It is expected that by 2025, there will still be some new production capacity in the n-butanol market, and the supply side of n-butanol is still being released. The market supply will continue to be mainly loose, but with policy regulation, the real estate market is expected to gradually warm up in 2025. Therefore, the demand for raw material n-butanol in the terminal market also has positive expectations. From the analysis of the market situation of n-butanol in 2024, the performance of the demand side plays an important role in influencing the n-butanol market. Due to the loose supply side and the overall increase in production capacity, the n-butanol market will still fluctuate in 2025, but the overall fluctuation space may narrow compared to 2024. The market will gradually adapt to the changes in the market pattern. In addition, more attention should be paid to changes in exports.