USA Isopropyl Alcohol Prices Expected to Rise as Q4 2023 Commences
- 19-Oct-2023 4:09 PM
- Journalist: Li Hua
Astonishingly, Isopropyl Alcohol (IPA) prices across the United States are projected to witness a sudden incremented trend, parting manufacturers, consumers, and businesses scrambling to cope with the economic implications. This alarming surge, which began in early October 2023, has been further attributed to an acute shortage caused by disrupting supply chain activities. Furthermore, geopolitical tensions and trade disputes among major exporting and consuming nations have added another factor to the existing challenges.
The Market experts stated that this rise in the prices of IPA can be traced back to several factors. First, the ongoing disruptions increase has severely impacted IPA production and distribution. Many manufacturing units faced a temporary closure during the first week of October, while transportation restrictions further hampered the movement of essential raw materials, including propylene, a key ingredient used to produce IPA. Additionally, the increased demand for IPA as a crucial component in making hand sanitizers and disinfectants in the pharmaceutical industries further strained supplies.
Furthermore, the supply chain issue from the exporting nations is one of the major drives for this month's rise in the prices of IPA across the United States. Due to the temporary suspension of operational activities in exporting countries, manufacturing units may experience weekly or monthly closures. These closures can be attributed to factors like maintenance requirements, the occurrence of festivals, or related celebrations, resulting in reduced labor within the units. This is likely to affect the overall global supply chain momentum during the entire month of October, keeping the prices of IPA in the northerly direction.
Moreover, apart from that, the consumption of propylene has surged across multiple sectors, including the automotive, packaging, and construction sectors. Also, the reopening of economies post-pandemic has further exacerbated this demand as industries ramp up production to meet rebounding consumer necessities for both upstream and downstream products such as IPA.
Parallely, a significant rise in crude oil prices during the same timeframe also contributed to this price rise. According to US Energy Information Administration data, the US crude oil inventory draws resumed in the second week amid a counter-seasonal uptick in refinery demand and strong export momentum. Because of a larger-than-expected drawdown in US storage and rising tensions in the Middle East that could disrupt oil supplies from the region—Iran has called for an oil embargo on Israel—oil prices spiked by about 2% to a two-week high as of mid-October. The price rise has led to an increase in the cost of byproducts derived from crude oil, such as propylene, which is a key component used in the production of IPA.
In conclusion, the IPA market has experienced a price decline in the past months; however, as winter draws near, Isopropyl Alcohol (IPA) prices are beginning to rebound due to increasing consumption in various pharmaceuticals and other industrial sector throughout the month of October and forthcoming period as well.