Cost Reduction, Weak Demand: DOP Prices in May Fluctuate and Decline

May 28th News

May plasticizer DOP prices fluctuated and declined in China

According to the commodity market analysis system, as of May 28, the DOP price was 9,250.83 CNY/ton, a fluctuating decline from the DOP price of 10,050.83 CNY/ton on May 1, with a price decrease of 7.96%. The overall DOP market in China showed a fluctuating downward trend, mainly due to weak upstream raw material costs and weak downstream demand.

Cost Side: Support from raw materials weakens

In May, the price of raw material iso-octanol fluctuated and declined.

According to the commodity market analysis system, as of May 28, the price of 2-ethylhexanol was 7966.67 CNY/ton, a fluctuating decrease from 8800 CNY/ton on May 1, with a price decrease of 9.47%; and a fluctuating decrease from 9066.67 CNY/ton on May 9, with a price decrease of 12.13%. The price of propylene has fallen, leading to a reduction in costs; in terms of supply and demand, the operating load of 2-ethylhexanol enterprises in China has decreased, resulting in a tightening of 2-ethylhexanol supply. With weak demand for 2-ethylhexanol, its price has declined. The fluctuating decrease in the price of 2-ethylhexanol has increased the downward pressure on DOP prices.

Phthalic anhydride market is in a weak consolidation in China.

According to the commodity market analysis system, as of May 28, the price of o-xylene phthalic anhydride in China was 8,906.67 CNY/ton, a slight decrease from 8,933.33 CNY/ton on May 1, with a price decrease of 0.30%. As the cost of phthalic anhydride has decreased, the support for phthalic anhydride has weakened, leading to a reduction in the operating load of phthalic anhydride enterprises and a tightening supply of phthalic anhydride, which increases the downward pressure on its price. The decline in the price of phthalic anhydride will further increase the downward pressure on DOP prices in the future.

May DOP Market Supply and Demand Analysis

Supply side: Overall supply is ample.

In May, the capacity utilization rate in the DOP industry was 52%, down 5 percentage points from April. Despite shutdowns at facilities operated by companies such as Fujian Chunda and Ningbo Aijing, the overall supply situation remained relatively loose. Some producers chose to offer discounts and reduce prices to ease inventory pressure.

Demand Side: Persistent Weakness, Driven Primarily by Inelastic Demand

Downstream users have low purchasing intentions, generally focusing on small orders for essential needs, and have a low acceptance of high-priced goods. The overall market trading atmosphere is flat, lacking sustained volume, making it difficult to effectively boost prices.

SpotCom system: Short selling pressure continues

The moving average spread is a core indicator for identifying trends. Looking at the moving average trend of DOP prices in May: The spread between the 5-month DOP moving average and the 10-day moving average first widened and then narrowed, while the spread between the 10-day moving average and the 20-day moving average continued to widen. This indicates that bearish forces on DOP remain persistent, but downward pressure has eased.

In May, the DOP price has remained at a low level within 30 days, while the price range within 90 days and one year is at a medium to high level, with prices gradually falling back to the medium level. The price correction is obvious, but as prices approach the lowest level of the year in China, the room for DOP to fall is limited.

Market Overview and Future Expectations

The plasticizer product data analyst believes that, looking ahead to June, the DOP market is expected to continue facing significant downward pressure. As some previously shut-down production units resume operations, market supply is likely to increase, while the recovery in demand may fall short of expectations. Under the combined influence of weak cost support and sluggish demand, the market is forecast to remain in a weak consolidation phase, with prices potentially falling further. It is recommended to closely monitor trends in raw material octanol prices, changes in industry operating rates, and the pace at which downstream demand begins to pick up.