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Di isopropyl Ether Prices Decline in US Amidst Improvement in Supply Chain Activities
Di isopropyl Ether Prices Decline in US Amidst Improvement in Supply Chain Activities

Di isopropyl Ether Prices Decline in US Amidst Improvement in Supply Chain Activities

  • 09-Oct-2023 6:12 PM
  • Journalist: Kim Chul Son

In September 2023, the Di isopropyl Ether prices showed a bearish trend amid increasing supply rates from exporters. Initially, supplies were low from key exporters of Asia due to the affected supply chain activities and production rates of Isopropyl Alcohol and Di isopropyl Ether.

On August 30, 2023, Hurricane Idalia made landfall and impacted the supply chain activities. The operational rates were low in the downstream industries, and offtakes of Di isopropyl Ether remained sluggish from downstream industries amid weak availability of supplies. As per the sources, Di isopropyl Ether prices declined marginally by 1% and hovered at USD 2694/MT at the end of September 2023.

Meanwhile, the precursor Isopropyl Alcohol market was bullish amid weak availability of supplies due to a decline in production rates. At the same time, the Zhuhai Long Success, in Guangdong, China, with an Isopropyl Alcohol plant capacity of 50,000 MTPA, operated at lower run rates from August and impacted the Di isopropyl Ether production rates. Consequently, the Di isopropyl Ether production rates were moderately low in China. At the same time, the occurrence of typhoon Saola in China impacted the supply rates of exporters.

In mid-week, the production rates of upstream Isopropyl Ether increased due to an escalation in Isopropyl Alcohol demand from cosmetics manufacturers. It increased the production rates of Di isopropyl Ether in the producing countries.

Supply chain activities improved from exporters, and Di isopropyl Ether inventory levels increased in the market amid consistent offtakes from the buyers. As per the sources, the USA's manufacturing Purchasing Manager's Index improved during September 2023 but remained below 50, indicating a slowdown in the contraction of manufacturing sector activities. Consequently, orders remained consistent from the downstream buyers amid moderate inquiries from cleaning agents and personal care product manufacturers due to high inflation in the country.

Meanwhile, the cost support was firm on upstream Propylene, backed by rising upstream prices amid a decline in global inventories of Crude oil. The Crude Oil production cuts by OPEC+ and rising inflation and economic damage in the US is the reason behind this hike in upstream prices. As per the sources, OPEC+ will reduce the Crude Oil production cuts by 1.66 million barrels per day till the end of 2024.

According to the sources, Saudi Arabia and Russia will further cut their Crude Oil production by 1 million barrels per day and their exports to 300,000 barrels per day during Q4 2023. It will simultaneously raise the production costs of upstream Acetone during the upcoming months.

As per the estimation, the Di isopropyl Ether price trend will remain firm during Q4 of 2023. The cost support will escalate on upstream Propylene due to Crude Oil production cuts. It may negatively impact the production rates. Simultaneously, the anticipated hike in freight costs amid escalation in fuel prices during winter will raise the import costs, and Di isopropyl Ether prices will remain firm in the market.

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