Italian Consumption Drives Diisononyl Phthalate Prices in Europe in July 2024

During the month of July, Italian consumption of Diisononyl Phthalate (DINP) drove significant volumes. Growing construction material demand throughout Italian markets and subsequently higher export potential into Poland kept the DINP markets elevated. Marginal consumption recovery of plasticized PVC derived out of DINP in Germany was observed last month, which further added on demand in July, yet that did not translate to construction activity on the ground previous months. In this context, DINP pricing continues to surge adding challenges as well as opportunities for the downstream PVC consumers.

The month of July began with increased production through German as well as Dutch markets as rainfall and flooding eased across the Rhineland, allowing logistics and supply situation to improve. Italian orders for deliveries were priced in the beginning around CFR Genoa at USD 1928/MT, with no price corrections over previous deliveries. As the months progressed, spot orders improved YoY basis and more material availability as more ships traversed through Rhine to Rotterdam for Genoa and other deliveries from Ludwigshafen BASF unit. DINP orders improved across Mediterranean regions like Greece, Croatia. Poland continues to be a major consumer of plasticized PVC from Italy.

A primary market participant for DINP prices revealed that as PVC prices surged in Europe after EU parliament elections went in favor of Ursula Von Der Leyen, the spot markets observed bullish run. They revealed that despite weaker construction demand across Europe, DINP consumption in Germany, Italy and Netherlands surged for plasticized PVC production. This demand was driven by increased focus on renewables and largely generated through new cable’s installations that has been keeping major demand throughout the markets. Italy’s construction demand eased in July, however inventory stocks have depleted for DINP and subsequently plasticized PVC, as more exports demand to neighboring Southern Mediterranean countries kept the markets afloat and did not ease demand pressure over DINP. The prices of DINP deliveries to Genoa also surged on the account of higher freight cost for APAC bound ships, especially Korea and Singapore. By the end of the month, explosion at BASF Ludwigshafen Southern unit, alerted a speculative buying in the spot markets where Italian, German as well as Dutch producers saw higher spot demand and the prices surged further.

As Europe continues to focus on renewables, prices of DINP are forecasted to surge further. ChemAnalyst forecast for bullish DINP prices due to higher demand, moderate cost pressures and continuing logistical situation for exports. Inbound imports to Europe have, although at Ex-factory basis of DINP remained relatively lower, but the high freight and insurance cost has kept the prices up. Poland, Italy, Netherlands etc. to remain major drivers for DINP consumption for the next quarter as their macroeconomic fundamentals remain relatively better than other Eurozone countries.