DOP Prices Edge Up in Mid- November Amid Raw Material Cost Hikes, but Off-Season Slump Looms

In November 2024, the market for Dioctyl Phthalate (DOP), a widely used plasticizer, witnessed fluctuating trends in pricing and demand in the Asian market following a relatively stable October. The market dynamics, driven by variations in raw material costs and seasonal shifts in downstream demand, have created a mixed outlook for the near term.

During October 2024, Asian DOP prices showed temporary stability due to balanced supply and demand dynamics, as manufacturers maintained steady production levels to fulfill ongoing orders. Downstream demand and procurement remained generally active, while sufficient DOP supply helped keep prices in check. Although minor fluctuations were observed, the overall pricing environment remained stable by the end of the month.

However, as November unfolded, in the Asian DOP market, the raw material market began to see notable shifts. The price of 2-ethylhexanol (2-EH), a primary input for DOP production, started to fluctuate and rise due to renewed demand. Additionally, the cost of phthalic anhydride (PA), another key raw material, stabilized following previous fluctuations. This upward trend in raw material costs had a direct impact on DOP prices, leading to a gradual increase in the Asian market.

From the regional supply perspective, the recent uptick in regional freight costs, as shown by Drewry's Intra-Asia Container Index (IACI), which rose, has added mild logistical pressure to the DOP market. The stable pricing decision reflects a strategic approach to maintaining supply continuity while balancing potential import and export pressures due to fluctuating transport costs. Asia's DOP markets took on a flat-to-firmer trend after major producers kept their import prices unchanged and export prices higher.

Despite the price rise, seasonal factors are now influencing demand projections in the coming weeks of November 2024. With colder weather setting in, downstream PVC production, which relies heavily on DOP, is expected to decline, signaling the onset of the sector's off-season. This seasonal downturn, coupled with a general desire among downstream buyers to secure lower prices, is expected to weaken DOP demand in the coming weeks. Although current DOP prices are holding steady amid a delicate balance between supply and demand, further, the off-season slump may lead to softer pricing as production cuts affect procurement volumes in Asia.

As per ChemAnalyst, the DOP market in Asia is expected to decline in the coming months. While raw material costs appear to be stabilizing, seasonal reductions in plasticizer demand and higher inventory levels among downstream producers could suppress the recent stable trend. DOP Market participants anticipate that DOP prices will experience a phase of weak consolidation through the rest of November, as demand projections align with off-season expectations and pressure builds on the pricing front.