National Standard Isopropanol

Market Dynamics Report on Industrial-Grade Isopropyl Alcohol (IPA) in China

I. Price Trends
- **Benchmark Price**: On July 29, 2026, the Sinopec benchmark price for isopropyl alcohol stood at 7,041.67 RMB/ton. This represents a 13.73% increase from the beginning of the month (6,191.66 RMB/ton), but a daily decrease of 1.28%, indicating a pullback from recent highs.
- **Regional Price Disparities**: Prices in South China are approximately 200 RMB/ton higher than those in Shandong. Prices in East China are similar to Shandong levels, with the entire industry chain experiencing a synchronized price decline over the weekend.
- **Historical Price Comparison**: Current prices are in the lower-middle range over the past year but show a significant increase compared to the same period in 2025. The average market price for IPA in Jiangsu was 6,061 RMB/ton in 2025, reflecting a year-on-year decline of 30.21%.

II. Market Supply and Demand
- **Supply Situation**:
- The industry-wide operating rate for IPA is 61%, with a capacity utilization rate of only 57%. Some enterprises, such as Huizhou Yuxin and Dezhou Detian, have halted operations or are running at low capacity.
- Propylene supply continues to rise as multiple PDH (Propane Dehydrogenation) units restart, increasing propylene availability. However, the IPA industry operating rate remains low, resulting in tight market liquidity for spot goods.
- **Demand Situation**:
- Traditional downstream sectors, including coatings, inks, and pharmaceutical intermediates, show weak acceptance of high-priced raw materials, generally purchasing in small quantities based on immediate needs.
- The electronic cleaning sector benefits from the expansion of the AI chip industry, maintaining strong demand for electronic-grade IPA. High-purity electronic-grade products (purity ≥99.99%) face high certification barriers, ensuring stable bargaining power.
- Regarding exports, the window for the extension of India’s temporary zero-tariff policy has closed. Effective July 16, the base import tariff of 7.5% is reinstated, temporarily weakening the price competitiveness of Chinese IPA exports to India.

III. Costs and Profits
- **Cost Side**:
- Propylene prices experienced a \"sharp rise and fall\" in July, with the weekly average increasing by 9.61% compared to the previous week, though prices retreated over the weekend.
- Acetone prices continued their strong upward trend, although the momentum slowed in the mid-to-late week. The cumulative price increase for East China spot prices reached 23.94%.
- **Profit Situation**:
- The full cost of propylene-derived IPA exceeds 7,200 RMB/ton, while spot prices are around 6,600 RMB/ton, resulting in a loss of 675 RMB per ton.
- The full cost of acetone-derived IPA is approximately 6,900 RMB/ton, with spot prices at 6,600 RMB/ton, resulting in a loss of 325 RMB per ton.
- Cost transmission across the industry chain is blocked, with all production processes experiencing inverted margins (costs exceeding revenues).

IV. Related Product Dynamics
- **Diisopropanolamine (DIPA)**: On July 29, the benchmark price was 17,250.00 RMB/ton, representing a 0.49% increase from the beginning of the month, showing a market trend distinct from isopropyl alcohol.

Analysis and Judgment

1. **Short-term Price Trends**: Influenced by fluctuations in propylene and acetone costs, IPA prices are likely to continue consolidating in the short term. Although rising costs previously drove IPA prices up, weak downstream acceptance has led to lighter trading volumes, lacking the momentum for sustained price increases.

2. **Supply and Demand Relationship**: On the supply side, with the restart of PDH units and increased propylene supply, the IPA industry operating rate is expected to rise, but capacity utilization remains low, keeping spot liquidity tight. On the demand side, traditional downstream sectors exhibit strong resistance to high raw material prices, while demand in electronic cleaning remains strong, though overall demand growth is limited.

3. **Cost Transmission**: Cost transmission across the industry chain is hindered, with severe profit inversion for IPA producers. If raw material prices remain high while downstream acceptance does not improve, IPA prices will face downward pressure.

Forecasts

1. **Price Forecast**: IPA prices are likely to continue consolidating in the short term. In the long term, with the release of supply-side capacity and limited demand growth, prices may face downward pressure. It is expected that IPA prices will fluctuate within the range of 6,500–7,000 RMB/ton in the near future.

2. **Market Trends**: With growing demand for electronic-grade IPA in sectors like electronic cleaning, the market for high-purity electronic-grade products will maintain steady growth. In contrast, demand growth in traditional downstream sectors is limited, leading to intensified market competition.

3. **Industry Recommendations**: IPA producers should closely monitor raw material price fluctuations and downstream market demand changes, adjusting production plans and sales strategies accordingly. Additionally, companies should increase R&D investment to enhance product quality and added value to meet the market's demand for high-quality IPA. Furthermore, strengthening industry cooperation and resource integration will help improve capacity utilization and overall industry competitiveness.