Asian DOP Prices Stabilize After Witnessing Immense Fluctuations During Silver October

October is a month wherein several enterprises witness immense fluctuations in their commodity, and thanks to the holiday season celebrated in China, where Dioctyl Phthalate (DOP) derivatives are widely used in a variety of PVC products, including pipes, fittings, flooring, and toys have also experienced the same. At the beginning of October, due to the Golden Week, the prices of DOP in the Chinese market acknowledged a rebound amid restocking and a notable increase in procurement activity. However, after the celebration, the Chinese market exacerbated the downward trend in the product prices coupled with weak demand from the downstream PVC market.

Following the holiday break, which is massively celebrated in China in early October, DOP prices ceased their downward trend and experienced a rebound, with a notable increase in the demand from the downstream PVC industry. During the holiday period, plasticizer manufacturers actively procured upstream 2-EH, and downstream customers replenished their inventories after the holiday. This surge in demand for 2-EH led to a price spike of the product after the holiday. Moreover, the continuous active purchases and restocking contributed to the upward momentum of plasticizer, leading to a significant price increase for plasticizer DOP.

Several factors contributed to the decline in the product prices after the long week of celebration. Firstly, the raw material PA market experienced fluctuations and downturns, while the price of 2-EH remained relatively stable. Moreover, the fall in upstream Propylene prices further put downward pressure on the cost of 2-EH, another key raw material for DOP production. This decline in 2-EH costs further exacerbated the downward trend in the prices. This decrease in raw material costs led the manufacturers to reduce their production rates, temporarily stabilizing DOP supply.

Additionally, downstream demand for DOP remained average, further contributing to the price decline. Furthermore, the completion of downstream replenishment of 2-EH resulted in weak customer demand for the material this week. This reduced demand and the decline in 2-EH prices contributed to the overall weakening of the prices.

Henceforth, the oscillations witnessed throughout October, coupled with restocking in the downstream PVC industry followed by fluctuations in raw material markets, reduced production by DOP enterprises, and a weak downstream demand, led toward market stability to finally assessed at 1600 USD/tonne DOP Spot Ex-Shanghai, China during October 2023. As per ChemAnalyst, a further decrease in the DOP market is anticipated in the upcoming month as destocking activities might take place to avoid tax repercussions.