June 29th, according to reports
In June, the price of plasticizer DOP in China fell significantly.
According to the commodity market analysis system, as of June 29, the DOP price was 8,367.50 CNY/ton, a decrease of 8.48% from the DOP price of 9,142.50 CNY/ton on June 1. Influenced by the geopolitical conflict between the United States and Iran, the price of 2-ethylhexanol first slightly increased and then decreased. In June, the DOP price showed a trend of rising at the beginning of the month and then significantly falling throughout the rest of the month, characterized by "a slight increase followed by a continuous sharp decline."
Cost Side: The Support from Raw Materials Has Completely Collapsed
The primary raw materials for DOP are the main ingredient, iso-octanol, and the auxiliary ingredient, phthalic anhydride. In June, both major raw materials weakened simultaneously, completely removing the cost floor for DOP raw materials.
The price of raw material iso-octanol first saw a slight increase and then plummeted.
According to the commodity market analysis system, as of June 29, the price of 2-ethylhexanol was 7,400 CNY/ton, a decrease of 7.11% from the price of 7,966.67 CNY/ton on June 1, after initially rising and then falling. The premium on crude oil due to geopolitical factors has dissipated, and new 2-ethylhexanol production capacity in China has been released, leading to oversupply. Additionally, weak demand for 2-ethylhexanol has increased the downward pressure on its price, which in turn has increased the downward pressure on DOP prices.
Phthalic anhydride market in China shows a weak downward trend.
According to the commodity market analysis system, as of June 29, the price of ortho-phthalic anhydride was 8,200 CNY/ton, a 5.57% decrease from the price of 8,683.33 CNY/ton on June 1. The agreement between the United States and Iran led to a significant drop in crude oil prices, which in turn caused a decline in the price of ortho-xylene, reducing costs. Additionally, the demand for plasticizers during the off-season collapsed, leading to a dual negative impact that resulted in a decline in both ortho-phthalic anhydride and naphthalene-based phthalic anhydride. In June, the Chinese phthalic anhydride market experienced a fluctuating downward trend. The decrease in phthalic anhydride prices led to the disappearance of the cost support for DOP.
June DOP Market Supply and Demand Analysis
Supply side: Overall supply exceeds demand.
In June, the capacity utilization rate of the DOP industry in China was 52%. The main factories' operations were basically stable, with the operating rate increasing to around 60% by the end of the month. However, procurement demand was overly weak, leading to an increase in available supply in the market and a slow accumulation of inventory.
Demand side: During the PVC off-season, demand for DOP in China remains weak.
Demand-side weakness is the core factor restraining the upward trend of the market. In June, downstream PVC products (such as artificial leather, cable materials, films, and floor coverings) enter the traditional low season, with terminal orders declining. Downstream factories adhere to a just-in-time purchasing strategy, refusing to stock up in advance, and there is virtually no large-scale centralized procurement. The demand for plasticizers remains weak.
Market Overview and Future Expectations
Plasticizer product data analysts believe that in terms of costs: with the ceasefire between the United States and Iran, crude oil prices have fallen, leading to a decline in downstream prices. The prices of 2-ethylhexanol and phthalic anhydride have dropped, reducing the raw material costs for DOP. In terms of supply: plasticizer companies have resumed operations, increasing the market's available supply, and inventories are slowly building up. In terms of demand: the market is in the off-season, and it is difficult for downstream demand to see substantial improvement. With weakening raw materials, increased supply, and the off-season for downstream demand, these three negative factors are converging, increasing the pressure on DOP to fall. It is expected that the DOP market will continue to be weak, with DOP prices fluctuating downward.
