DOP Market in Asia Struggles With Weak Demand and Bearish Market Sentiment
- 19-May-2023 6:03 PM
- Journalist: Nicholas Seifield
Dioctyl Phthalate (DOP) prices in the Asian region have been experiencing a decline. This decline has been attributed to weak downstream demand and the availability of cheaper alternatives, which have led to a decrease in prices. However, both buyers and sellers had an opinion that the weak buying interest and bearish sentiment contributed to the drop in DOP prices. Also, with no pickup in demand after the week-long National Day holidays in China, DOP prices had edged southwards, losing an average of USD 43/MT Ex-Shanghai in the month of April 2023.
The weak buying sentiment has been due to the lackluster downstream demand as plastic end-product producers had squeezed margins due to the region's high inventories of Polyvinyl Chloride (PVC). As a result, DOP producers faced challenges in selling large quantities of cargo, leading to low production rates amidst alleviated inventory pressure.
DOP producers even acknowledged that sales had been very slow in the past months, and it was not easy to sell large stocks. Due to the slow uptake in material, makers have been operating at low production rates. They fear that further downward movement in upstream Crude oil costs will exert additional downward pressure on DOP prices because they witnessed the market for raw material Phthalic Anhydride falling during the week ending 12th May, contributing to the overall decrease in the cost of DOP production.
There has been a recent rebound in DOP prices due to an improved supply of Phthalic Anhydride, which has returned to normal, and the stabilization of plasticizer raw material costs. Despite this, the demand for plasticizers, including DOP, remains weak.
As a result, ChemAnalyst forecasts that the price of DOP may continue to decline if demand from the plasticizer industry does not improve, along with the need to monitor the volatile feedstock market, particularly the changes in crude oil prices, as it can have an impact on the prices of DOP raw materials.
