As of May 12th, the DOP price was 10000.83 yuan/ton, a fluctuating decrease of 0.99% compared to the DOP price of 10100.83 yuan/ton on May 6th. In May, the overall DOP market showed a trend of high level narrow range oscillation and weak consolidation, with a slight downward shift in price center compared to April, but still maintaining a relatively high level for the year. The core logic is the weakening of cost support, loose supply and demand, and weak downstream demand.
Cost side: Weakened support for raw materials
After the holiday, the price of raw material isooctanol first rose and then fell
As of May 12th, the price of isooctanol was 8766.67 yuan/ton, which first increased and then decreased by 0.38% compared to the price of 8800 yuan/ton on May 1st; Compared to May 9th, the price of isooctanol fluctuated and fell by 3.31% to 9066.67 yuan/ton. After the holiday, the price of propylene fluctuated and fell, and the cost of isooctanol decreased. In addition, the operating load of isooctanol enterprises decreased after the holiday, and the supply of isooctanol briefly tightened. In May, the price of isooctanol first rose and then fell. Overall, the marginal support for isooctanol cost after the holiday weakened, and the support for DOP increase was insufficient.
Phthalic anhydride market fluctuates and falls
As of May 12th, the price of phthalic anhydride from neighboring countries was 8910 yuan/ton, slightly lower than the price of phthalic anhydride on May 1st at 8933.33 yuan/ton, a decrease of 0.26%. Cost support, coupled with a decrease in production of phthalic anhydride enterprises after the holiday, led to weak consolidation of phthalic anhydride prices and weak support for DOP growth. But with the downward trend of ortho xylene prices, the downward pressure on phthalic anhydride prices is obvious, and the downward pressure on DOP in the future market is increasing.
Post holiday DOP Market Supply and Demand Analysis
Supply side: Rising production and loose supply
In May, some DOP units of plasticizer companies were repaired and restarted, and the industry’s operating rate rebounded to around 65%. The market supply is sufficient, and manufacturers’ willingness to raise prices has weakened, with a focus on shipping.
On the demand side: sustained weakness, primarily driven by rigid demand
More than 90% of DOP is used as a plasticizer for PVC, resulting in high inventory and weak demand in the downstream PVC industry. The recovery of terminal industries such as real estate and packaging is slow, and downstream factories only maintain essential procurement without large orders and low willingness to stock up. Environmental substitution is accelerating, and environmentally friendly plasticizers such as DOTP are squeezing out the market share of DOP, resulting in a long-term bearish demand structure. The overall demand for DOP remains weak, with insufficient growth in essential demand. Traders are reducing their holdings at high prices and operating cautiously. Upstream and downstream supply and demand are deadlocked, and transactions are mostly small orders for essential needs, limiting price fluctuations.
Market Overview and Future Expectations
The data analyst of Shengyi Society’s plasticizer products believes that after the holiday, raw material prices fluctuated and fell, and DOP provided insufficient support. In addition, with loose supply and weak demand, DOP’s upward support was insufficient. At the end of the month, there may be demand for replenishing inventory downstream, with loose supply and weak demand being the main tone. If raw materials continue to weaken, the downward pressure on the future DOP market will increase. Overall, the DOP market in May was in a game state of “high cost, weak demand, and tight balance”. The lack of significant upward momentum in prices, but the bottom line of costs limits the space for deep decline, and the overall trend will be dominated by high-level weak consolidation and narrow range oscillation.
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