1.

 Analysis of the status quo of the industrial chain of

the isopropanol  industry: insufficient supply of upstream raw
materials and downstream applications have not yet been
effectively developed

——Panorama of the industrial chain of isopropanol industry

On the upstream side, from the perspective of isopropanol

preparation methods, there are currently three
main methods : acetone  hydrogenation, propylene hydration, and
isopropyl acetate hydrogenation. Therefore, the raw materials involved
mainly include propylene, acetone, acetic acid,
hydrogen, Catalysts,  etc.

In the downstream, from the perspective of the use of isopropanol,

it is mainly used as solvents and intermediates. The demand market
mainly includes the pharmaceutical industry, pesticide industry  ,
coating industry, plastic industry, cosmetics industry, industrial
cleaning industry, etc.
 2) Analysis of the upstream of the industrial chain: insufficient
supply of raw materials

At present, although China has isopropanol production capacity for

isopropyl acetate hydrogenation, it has not yet been put into production
due to process problems. Therefore, the current domestic isopropanol
raw materials are mainly acetone and propylene.  From the perspective
of the supply and demand of acetone and propylene in China, although
the supply of acetone and propylene in China has grown rapidly in
recent years, in the face of rapidly increasing demand, the industry's
supply is still insufficient and depends on imports to a certain extent.
Specifically:

——Acetone : As of 2019, China's acetone production capacity

was about 1.68 million tons, with an output of 1.5889 million tons, and
an operating rate of 89.82%; China's apparent consumption of acetone
in 2019 was 2.286 million tons, of which 779,200 tons were imported,
accounting for performance consumption 34.1% of the total amount,
China's import dependence on acetone is relatively high.

——Propylene: In the past ten years, with the technological

advancement of coal-to-olefins, domestic propylene production
capacity has risen rapidly since 2013. In 2019, the total production
capacity of propylene in China's mainland has exceeded 40 million
tons, and the annual new production capacity was 4.1107 million
tons. , An increase of 11.43% month-on-month.

With the continuous increase in propylene production capacity, the

industry's output has also increased. In 2017, domestic propylene
output was 25.97 million tons and reached 29.28 million tons in
2019. Despite the continuous growth of production capacity and output,
China’s propylene market gap is still large. In 2019, domestic
propylene equivalent consumption was about 42.3 million tons, while
China’s propylene production in 2019 was about 29.28 million tons,
and China’s propylene gap reached 13.02 million tons. huge.

3) Downstream analysis of the industrial chain: applications have

not yet been effectively developed

From the perspective of the proportion of domestic isopropanol

consumption, it is mainly used in six fields, pharmaceutical
intermediates (21%), organic synthesis and others (20%), pesticides
(18%), electronic cleaning (18%), inks ( 15%) and coatings (8%), of
which medical applications are included in organic synthesis and
others, accounting for a relatively small proportion.
 Compared with developed countries, the application fields of
isopropanol in China have not been effectively developed. For
example, isopropanol has a strong sterilization ability, the scope of
sterilization is the same as that of ethanol, and the sterilization
performance even exceeds that of ethanol. It is mostly used for skin
and medical devices. The disinfection can also be used for the
disinfection of prostheses.

In some countries, isopropyl alcohol is the most commonly used

disinfectant in public places such as beauty salons. In addition, China
has become the world's main base for electronic and electrical
components. The application of isopropanol in this field has just
started, and the overall consumption is expected to continue to
increase in the future.

2. Analysis of China's isopropanol industry, supply and

demand status analysis: severe overcapacity, demand is driven by
exports

——Analysis of supply status: severe overcapacity and low

utilization rate

Before 2010, China's domestic production of isopropanol could not

meet the demand for a long time. At that time, the only domestic
companies with large-scale installations were Jinzhou Petrochemical
and Shandong Haike Chemical, both of which were propylene
hydration technology, with a total production capacity of 130,000
tons. About half of the supply gap needs to rely on imports to make up.

After 2010, China's isopropanol production capacity began to

expand rapidly, reaching about 800,000 tons in 2015 and 1.095 million
tons in 2019 (including 84,000 tons of long-term parking in Panjin
Changchun, and 176,000 tons of Kailing Chemicals that have been in
parking. Isopropyl acetate hydrogenation method to produce
isopropanol equipment).

The three new isopropanol installations in 2019 are: Hunan

Changde Chemical 15,000 tons/year, Liansheng Technology 30,000
tons/year, and Qingdao Hailijia 50,000 tons/year isopropanol
installations. The cumulative additions are The production capacity is
95,000 tons/year.

From the perspective of China's isopropanol output, the industry's

output has not expanded as rapidly as production capacity, and the
capacity utilization rate has been at a low level below 40. On the one
hand, there is a serious overcapacity in the domestic isopropanol
industry, enterprises are generally losing money, and the production
power of enterprises is insufficient; on the other hand, the domestic
demand for isopropanol is insufficient, and nearly half of the industry
demand is driven by exports, and enterprises have to face imported
products. competition.

Specifically, the output of isopropanol in China in 2015 was about

210,800 tons, to 390,200 tons in 2018, which was the highest in recent
years. In 2019, the output of isopropanol was 387,100 tons, a decrease
of 3,100 tons from the previous year.

2) Analysis of demand status: insufficient domestic demand is

mainly driven by exports

China's isopropanol capacity utilization is relatively large, and one

of the major reasons is insufficient demand. The data shows that the
apparent domestic consumption of isopropanol showed an upward
trend from 2015 to 2018, reaching 326,700 tons in 2018, the highest in
recent years;

In 2019, as exports continued to grow substantially, domestic

isopropanol consumption continued to be sluggish. Apparent
consumption of isopropanol dropped to 236,900 tons, but exports
increased sharply to 183,100 tons, a year-on-year increase of 73.7%,
accounting for national isopropanol For 47.3% of the output, the
demand for isopropanol from exports is obviously driving.

Since 2020, with the global outbreak of new coronary pneumonia,

foreign demand for disinfectant products-isopropanol has greatly
increased, and China's isopropanol exports have seen a situation
where both volume and prices have risen. From January to July,
China's isopropanol has accumulated The export was 181,000 tons,
which is close to the whole year of 2019.

In terms of export prices, the average export price from January to

July was US$1.18/Kg, an increase of 71.01% from the average export
price of US$0.69/Kg in 2019.
 3. China's isopropanol product price analysis: Affected by the
epidemic, the price of isopropanol first rose and then fell

Since 2020, driven by the sharp increase in export volume and cost
support, the domestic isopropanol market has risen fiercely. After two
rounds of increases, the average price of isopropanol has risen from a
low of 6,000 yuan/ton to a high of 13,900 in early June. Yuan, the
biggest increase reached 131.67%.

Later, as the favorable foreign trade slowed down, export orders

were significantly reduced, and market prices continued to adjust. In
early August, the East China market fell to about 7,000 yuan/ton. After
that, the price declined and the price reached about 8,000 yuan/ton at
the end of the month.

Specifically, in the first quarter, despite the overall sluggishness of

the chemical product market, isopropanol became one of the few
products whose prices increased, and the increase was huge. In mid-
March, the epidemic spread abroad, and export orders for isopropanol
began to soar. The supply of goods in the market was slightly tight,
and the price continued to soar.

In mid-April, the price of isopropanol reached a staged high. The

mainstream price in the East China market rose from 5675 yuan to
about 12,700 yuan, an increase of 123% in more than a
month. Subsequently, the market entered a period of turbulence, and
prices continued to rise at a high level.

Starting in mid-May, due to the tight prices of upstream raw

materials acetone and propylene, the downstream market just needs to
be sold smoothly. The isopropanol market has begun to rise again.
Manufacturers are willing to price strongly, and the market spot is tight,
and the isopropanol market is again Start the rally.  On June 9, the
mainstream price once again rose to a high of 14,100 yuan for the
year.

Since mid-to-late June, the price center has begun to fall. In early
July, the average domestic isopropanol price was 11,600 yuan/ton, and
the average price at the end of the month was 9,650 yuan/ton, and the
price fell by 16.81% during the month.

At the beginning of August, the price of isopropanol continued to

drop to about 7,000 yuan/ton. After that, supported by the sharp
increase in the price of raw material acetone, the price of isopropanol
rose to about 8,000 yuan/ton, but the demand was still insufficient.

4. Analysis of the market competition pattern of China's

isopropanol industry: industry enterprises and regional
competition are relatively concentrated

Judging from the competition among enterprises in China's

isopropanol industry, analysis of enterprise capacity shows that
China's isopropanol production enterprises are relatively concentrated.
As of the end of 2019, there are about 13 isopropanol production
enterprises nationwide, with a total production capacity of about 1.095
million tons.

Among them, Kailing Chemical's isopropanol production capacity

ranks first in the country, with 276,000 tons, accounting for 25.2% of
the national isopropanol production capacity; followed by Xinhua and
Yancheng Supuer, both with a production capacity of 150,000 tons,
accounting for 13.7% . In addition, Jinzhou Petrochemical has a
production capacity of 100,000 tons and above, of which all are below
100,000 tons.
 If you exclude the 176,000 tons of Kailing Chemical and the 84,000
tons of long-term parking capacity in Panjin Changchun, the total
production capacity of the industry is 835,000 tons, and Xinhua shares
first with 150,000 tons.
 From the perspective of regional competition in China's isopropanol
industry, China's isopropanol is mainly distributed in six provinces:
Shandong, Zhejiang, Jiangsu, Liaoning, Guangdong, and Hunan.
Among them, Jiangsu has the largest production capacity, with a total
production capacity of about 376,000 tons, accounting for the country’s
total production capacity. 34.3% of production capacity;

The second is Shandong Province, with a production capacity of

about 320,000 tons, accounting for about 29.2%. The production
capacity of Liaoning Province is about 184,000 tons, accounting for
16.8%. The production capacity of isopropanol in Zhejiang, Guangdong
and Hunan are 130,000 tons, 70,000 tons, and 15,000 tons, accounting
for 11.9%, 6.4%, and 1.4%, respectively.
 For the above data and analysis, please refer to the " China
Isopropanol Industry Market Outlook and Investment Strategic
Planning Analysis Report  " by the Qianzhan Industry Research
Institute. At the same time, the Qianzhan Industry Research Institute
provides industrial big data, industrial planning, industrial declaration,
industrial park planning, and industrial investment promotion. Wait for
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