Houston — US isopropyl alcohol prices touched a seven-month low on Oct. 27, with S&P Global Platts assessing it $60/mt lower on the week at $1,100/mt FOB USG.
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On a delivered basis, prices fell $95/mt to $1,125/mt. Platts last assessed IPA prices lower on March 17, at $920/mt FOB USG and $980/mt DER.
Current prices are a stark contrast from earlier in the year when prices hit a multi-year high on the back of consumer-driven demand for hand sanitizing products. US isopropyl alcohol was assessed at its highest level on record -- since 1982 -- on April 14, 2020, when it hit $3,860/mt FOB USG and $3,920/mt DER, according to Platts data.
Since then, domestic demand for isopropyl alcohol has sharply declined, with prices approaching pre-pandemic levels. Market sources indicated that an abundance of supply and stagnant demand are pressuring prices, with no expectation for demand to reach peak-pandemic levels even in the face of a second wave of infections.
In contrast, industrial ethanol prices held steady at a six-year high on Oct. 27, with Platts assessing prices at 450 cents/gal for 190-proof DSP and 475 cents/gal for 200-proof.
Prices have held at this multi-year high since Sept. 8, with 190-proof and 200-proof industrial ethanol pricing around 157 cents/gal higher than the five-year average of 294 cents/gal and 318 cents/gal, respectively.
Market sources said that demand for industrial ethanol is strong and only growing as consumer need for economically viable sanitizing products increases. Although industrial ethanol has hit the spotlight this year as a base for sanitizing products, it is used in many industries to make cosmetics, pharmaceuticals and cleaners.
"Some states actually have a problem in that they need the industrial ethanol for other purposes and they can't get enough," a market source said.
Demand for industrial ethanol remains strong despite lags seen in isopropyl alcohol because industrial ethanol-based hand sanitizers cost less to make, said the source.
"Demand for high-quality grades is still strong and we expect it to remain this way through Thanksgiving," a second source said.