Costs Decline and Supply Exceeds Demand, DOP Prices Fluctuate Downward in August in China

August 29 update

In August, the price of plasticizer DOP in China fluctuated and fell.

According to the commodity market analysis system, as of August 29, the DOP price was 7617.50 CNY/ton, a fluctuating decrease from the DOP price of 7955.83 CNY/ton on August 1, with a price decrease of 4.25%. The prices of raw materials, such as 2-ethylhexanol and phthalic anhydride, have been fluctuating and decreasing, increasing the pressure on DOP prices to fall; in August, the operating load of DOP enterprises remained at a high level, leading to an increase in DOP production and supply. However, downstream demand has not improved, and the interest in purchasing inquiries for DOP remains lukewarm, limiting the improvement in DOP transaction volumes. With increased supply and decreased costs, the price of plasticizers in August has been fluctuating and decreasing.

August raw material isooctanol prices fluctuated and fell in China

According to the commodity market analysis system, as of August 29, the price of 2-ethylhexanol was 7283.33 CNY/ton, a fluctuating decrease from the price of 7533.33 CNY/ton on August 1, with a price decrease of 3.32%. In August, the operating rate of 2-ethylhexanol production facilities in China increased, rising from less than 80% in July to 95% by the end of August. Additionally, new 2-ethylhexanol production capacity came online, increasing the supply of 2-ethylhexanol. Downstream plasticizer manufacturers operated at high levels, leading to a recovery in demand for 2-ethylhexanol. With the increase in supply and the recovery in demand, the price of 2-ethylhexanol fluctuated and decreased in August. The cost of plasticizers decreased, increasing the downward pressure on DOP prices.

August raw material phthalic anhydride prices bottomed out and rebounded in China

According to the commodity market analysis system, as of August 29, the price of ortho-phthalic anhydride in China was 6,300 CNY/ton, a decrease of 5.26% from the price of 6,650 CNY/ton on August 1. In August, the price of ortho-xylene fluctuated and fell, while the price of industrial naphthalene hit bottom and rebounded, providing significant cost support for phthalic anhydride. The operating load of phthalic anhydride equipment in China remained at a low level, with the operating rate of phthalic anhydride enterprises around 60%, leading to a reduction in the supply of phthalic anhydride. The operating load of downstream plasticizer enterprises remained high, maintaining demand support for phthalic anhydride. With the reduction in supply and the decline in costs, the price of phthalic anhydride in China hit bottom and rebounded in August. As the raw material phthalic anhydride price rebounded, the cost of plasticizers also stopped falling and began to rebound, reducing the downward pressure on the price of DOP plasticizers in August.

Future Market Expectations

Plasticizer product data analysts believe that in terms of cost, the price of 2-ethylhexanol has fluctuated and declined, while the price of phthalic anhydride has bottomed out and rebounded. The cost pressure on DOP plasticizers remains downward. In terms of supply, the operating rates of plasticizer companies are at high levels, and the production of plasticizers has increased, leading to ample supply. On the demand side, the overall economy is sluggish, and due to anti-competition within China and the elimination of outdated capacity, downstream demand is weak. In summary, with strong supply and weak demand, along with continued downward cost pressure, it is expected that the price of DOP plasticizers will continue to fluctuate and decline.