DOP Prices to Stabilize in Asia Amid Shifts in the Supply Dynamics in September 2024

Since early September 2024, Dioctyl Phthalate (DOP) prices in Asia have experienced a rebound, reversing the previous downward trend. The previous dip followed a consistent decline in the cost of 2-Ethylhexanol (2-EH), a key raw material. The recent stabilization in 2-EH prices has expanded profit margins for plasticizer producers, boosting gross profits for downstream DOP products compared to August. From the upstream perspective, the OPEC basket crude oil price was assessed at USD 73.42 per barrel at the end of August 2024 supporting the depreciation of the DOP prices in August 2024.

The improved profit conditions spurred higher operating rates among plasticizer manufacturers, driving increased production for DOP. However, this week saw a significant shift as 2-EH prices ended their decline and rebounded, leading to a rise in DOP production costs. Despite this, DOP supply is expected to continue rising due to heightened production levels among plasticizer manufacturers. Additionally, the cost of Phthalic Anhydride (PA), another essential input, saw a slight decline, offering some relief against rising 2-EH costs.

In September 2024, downstream buyers in Asia adopted a cautious approach, focusing primarily on spot purchases while avoiding forward contracts. The overall trading environment remained subdued, characterized by low inquiry volumes and a lackluster market sentiment. Most transactions were driven by immediate needs, with speculative buying remaining limited due to ongoing uncertainties in the plasticizer industry.

Compounding market challenges, recent severe weather has further complicated trading activities in the region. Super Typhoon Yagi, one of the most devastating storms to hit Asia, caused widespread disruptions in chemical and petrochemical transportation, particularly from Hainan province. The storm inflicted property damage valued at approximately 12 billion yuan in southern China, with flooding and landslides suspending port operations, train services, and highways across multiple provinces.

Summing up, the market for Phthalic Anhydride (PA), a key raw material for DOP, has stabilized after a period of fluctuations, while 2-EH prices have shown volatility and increased. This has resulted in fluctuating and ultimately rising DOP production costs. DOP producers have maintained stable operations, with downstream market conditions gradually stabilizing. Demand from downstream sectors remains primarily driven by urgent requirements, with buyers negotiating prices and generally seeking lower-cost options.

According to ChemAnalyst, the outlook for DOP prices is cautiously optimistic. Increased supplies of both 2-EH and DOP, along with steady downstream demand, are expected to support price stabilization in the near term. However, rising raw material costs and logistical challenges to remain critical factors influencing market dynamics as the industry adjusts to evolving supply-demand conditions.