Cost Transmission DOP “Roller Coaster” Market Conditions

March 13th News

March Plasticizer DOP Price "Roller Coaster" Trend in China

According to the commodity market analysis system, as of March 13th, the price of DOP was 9,209.17 CNY/ton, a significant increase from the price of 7,700.84 CNY/ton on March 1st, with a price increase of 19.59%. Affected by the geopolitical crisis in the Middle East, crude oil prices surged, and the impact quickly spread downstream along the industrial chain, causing a substantial rise in the prices of isooctanol and phthalic anhydride. The sharp increase in raw material prices led to higher costs for DOP, resulting in a significant rise in the price of the plasticizer DOP.

Crude oil prices are being passed down to downstream sectors.

The Middle East crisis is the root cause of this round of market volatility. The geopolitical conflict in the Middle East has entered its 14th day, with shipping in the Strait of Hormuz almost at a standstill, disrupting about 25% to 30% of global maritime oil trade. To address the supply shortage, the 32 member countries of the International Energy Agency (IEA) have unanimously agreed to release 400 million barrels of strategic oil reserves, setting a new record. Under the tug-of-war between the panic of supply disruption and the intervention of reserve release, international oil prices have experienced a rollercoaster-like fluctuation. The Middle East crisis has "pushed up" oil prices, while the release of reserves aims to "pull down" oil prices; the interplay between these two factors has led to the recent sharp fluctuations in oil prices. As the origin of the entire chemical industry chain, the significant volatility of crude oil will eventually be transmitted to products such as isooctanol and phthalic anhydride. If the situation persists or escalates, concerns over the supply chain will support oil prices and the cost of chemicals; if the situation shows substantial improvement, market sentiment may quickly reverse. The brief dip followed by a sharp rise in oil prices indicates that the market's concern over geopolitical risks temporarily outweighs the short-term impact of the reserve release. Downstream, the price of phthalic anhydride has stopped falling and started to rise, while the price of isooctanol has stabilized, supported by the increase in raw material costs, which in turn provides greater support for the rise in plasticizers.

The price of the raw material 2-ethylhexanol first fell and then rose in China.

According to the commodity market analysis system, as of March 13, the price of 2-ethylhexanol was 8,333.33 CNY/ton, which first increased and then decreased from 6,666.67 CNY/ton on March 1, a price increase of 25%; and it decreased from 9,500 CNY/ton on March 10, a price decrease of 12.28%. Due to the impact of the geopolitical crisis in the Middle East, the surge in crude oil prices was transmitted downstream, causing the 2-ethylhexanol price to skyrocket by 42.50% in early March; afterwards, the market signaled a cooling down, leading to a sharp drop in the 2-ethylhexanol price, with the price on the 13th decreasing by 12.28% compared to the 10th. In March, the 2-ethylhexanol price first rose and then fell, experiencing a rollercoaster. Cost support increased, providing greater support for the rise in DOP prices.

Phthalic anhydride market in China has experienced significant fluctuations and increases.

According to the commodity market analysis system, as of March 13, the price of ortho-phthalic anhydride was 8316.67 CNY/ton, a 35.24% increase from the price of 6150 CNY/ton on March 1. Affected by the geopolitical crisis in the Middle East, crude oil prices have risen significantly, leading to a substantial increase in the price of raw materials such as ortho-xylene, which has soared to 8200 CNY/ton. This has caused the cost of phthalic anhydride to rise, resulting in a significant increase in its price. The cost support for plasticizers has increased, further bolstering the upward trend in plasticizer prices.

Future Market Expectations

The plasticizer product data analyst believes that, from a cost perspective, the volatile crude oil market—driven by the geopolitical crisis in the Middle East—is being passed down to downstream industries. As a result, the price of isooctanol first rose and then fell, while phthalic anhydride prices have been fluctuating upward, leading to higher costs for the plasticizer DOP. In March, the DOP market experienced a “roller coaster” trend. Looking ahead, given the ongoing Middle East crisis and strong expectations of rising crude oil prices, these factors will continue to be transmitted downstream, pushing up the prices of isooctanol and phthalic anhydride. Coupled with increasing demand and supply, we expect the price of plasticizer DOP to continue its volatile upward trend in the coming period.