With the conclusion of the concentrated commissioning of new production capacity over the past two years, the supply-demand pattern of China's octanol industry has undergone a fundamental shift. Although the market rebounded at the end of 2025 as production cuts curbed the downturn, the industry will officially enter an overcapacity cycle in 2026. Intensified supply-demand contradictions will squeeze profit margins, making export expansion and green transformation the core paths for enterprises to break through the predicament.

Pattern Reshaping in 2025: Surging Capacity Forces Market Restructuring

In 2025, the octanol industry witnessed intense supply-demand competition amid rapid capacity expansion. The sharp increase in production capacity significantly boosted the industry's self-sufficiency rate, leading to a continuous contraction of import volumes. Meanwhile, exports demonstrated growth potential, and the capacity of domestic octanol for outward supply was gradually established.

Persistent supply expansion, coupled with slower-than-expected demand growth, dragged the market into a volatile downward trend throughout the year. In the second half of the year, as new production facilities were commissioned in a concentrated manner, the price benchmark kept declining and hit a multi-year low at one point. Cost inversion compelled the industry to conduct spontaneous adjustments: some enterprises took the initiative to reduce operating rates, and coupled with the unstable operation of new production units, the output dropped at the end of the year. This eased market sales pressure, stabilized and lifted the price benchmark, reversing the industry's loss-making situation.

In terms of profitability, the profit level of the octanol industry slumped to a recent low in 2025. Fortunately, the improved profitability of downstream related products boosted operational enthusiasm, effectively driving growth in octanol consumption. East China, Shandong and South China form the core consumer markets, among which specific downstream products have become the main driver of consumption growth. Leveraging their respective resource and industrial advantages, each region has boosted local consumption and forged a differentiated market demand structure.

Core Contradiction in 2026: Overcapacity Intensifies Industry Competition

Looking ahead to 2026, overcapacity will become the overarching core contradiction of the octanol industry throughout the year. The continuous release of new production capacity will push the industry's total capacity to rise sharply. However, limited new capacity in downstream sectors will restrict the room for consumption growth, further widening the supply-demand gap.

Imports will be further compressed as domestic self-sufficiency capacity strengthens, making exports a key measure to alleviate domestic sales pressure. Nevertheless, exports will also face cost and operational challenges arising from policy adjustments.

Industry profits and operating rates will remain under sustained pressure. Amid intensified market competition, small and medium-sized enterprises with weak technological and cost control capabilities will face passivity in production operations, and the industry's overall operating rate is expected to decline. Environmental protection and carbon constraint policies will accelerate the phase-out of backward production capacity, drive up industry concentration, and the trend of industrial differentiation will become increasingly prominent.

Key Paths to Breaking the Dilemma: Green Transformation and Structural Optimization in Parallel

Faced with dual pressures, the octanol industry is accelerating its transformation towards low-carbonization and high-endization. Process innovation has become the core competitiveness of enterprises: leading enterprises are actively deploying low-carbon production technologies, and the launch of relevant demonstration projects provides direction for the industry's transformation.

Product structure optimization is imminent. The current market features an oversupply of mid-to-low-end products and a shortage of high-end varieties. Enterprises investing in R&D and production capacity of high-end products can carve out a differentiated competition track. Regional layout will also be adjusted in line with policy orientation, tilting towards regions with resource and policy advantages, while efforts should be made to resolve supporting infrastructure bottlenecks.

2026 is a pivotal year for the reshuffling and restructuring of the octanol industry, with overcapacity and policy constraints accelerating industrial transformation. Only by focusing on technological upgrading, product optimization, and export expansion can enterprises maintain their foothold. The industry will gradually shift from scale expansion to quality and efficiency improvement, forming a new pattern of intensive and sustainable development.