Asian DOP Market to Record a Fall in Prices During January 2024

The Asian market for Dioctyl Phthalate (DOP) is poised to experience a decline with prices in Q1 of 2024, influenced by a global softening in plasticizer demand amid a slower economic recovery and an oversupply scenario. The DOP market faced challenges in 2023, particularly with diminished downstream PVC demand from the construction sector. This resulted in sluggish consumption both domestically and in export markets, while sellers grappled with narrow profit margins.

As of the week ending January 12, 2024, the Asian market witnessed a decrease in price quotations for the feedstock 2-Ethylhexanol (2-EH). Despite stable production of downstream plasticizers and major manufacturers making demand-based purchases, DOP prices followed a downward trend in Asian countries including South Korea and China. The market transaction volume of 2-EH weakened, leading to insufficient support for maintaining its high price. Consequently, the price of 2-EH showed a decline, contributing to increased downward pressure on DOP pricing momentum. Simultaneously, quotations for Polyamide (PA) also experienced a dip after the holiday period in China. The demand for PA procurement faced obstacles, resulting in decreased PA prices and a contraction in the PA market. These factors combined contributed to a reduction in DOP costs during the mid of the month.

The latest analysis suggests that DOP prices are expected to continue moving southward in Q1 of 2024 as the recent fluctuations in the raw material 2-EH and the decline in the PA market are anticipated to weaken the cost support for plasticizer DOP. Additionally, the stabilization of operating loads in plasticizer factories during the week has further diminished support for improvements in plasticizer inquiries.

Anticipation among Chinese and Southeast Asian market players vary, ranging from a modest decrease to a slight increase in pricing for February. According to a trader, sentiments are diverse, with many awaiting offers from a major South Korean player. The downstream PVC manufacturers mentioned running their factories below 50% capacity, with industry participants considering early holidays ahead of the Chinese New Year. As a ripple effect, these downstream players dropped the plans to build up inventories, resulting in a decrease in the DOP offtakes in the region.

As per ChemAnalyst, The DOP market is expected to maintain a subdued outlook for the first quarter of 2024 due to ongoing challenges in downstream PVC consumption, economic slowdown, and reduced seasonal inquiries during winters. Despite these persisting challenges, there is a glimmer of optimism for industry players as the potential easing of inflation may contribute to a gradual recovery in activity towards the latter half of the year.