Varying Demand Fundamentals Lead DOP Prices to Oscillate in Key Asian Economies in July 2023

After experiencing a bearish trend previously, the Chinese market has grown significantly which effectively highlighted an uptrend for the Dioctyl Phthalate (DOP) market during July amid a rebound in the plasticizer industry's robust prices. However, the Indian market remained subdued amidst the monsoon season weakened the demand dynamics for the plasticizers industry.

As per the recent assessment, the Chinese DOP market has showcased an upsurge of 3.5% to settle at 1366 USD/tonne spot Ex-Shanghai during July 2023. As per the market sources, Dongying Yimeide Chemical, Zhejiang Hongbo New Material Technology, and Zhenjiang Liancheng Chemical Industry increase their plasticizer production to cater to the growing demand of the DOP. Moreover, the prices of feedstock 2-Ethylhexanol fluctuated and then increased, which eventually surged the production cost of plasticizer DOP in China. The increasing downstream demand for PVC plasticizers had rebounded and further supported the price trend for plasticizer DOP. The delay of two policies in the "16 Financial Regulations" helped to ensure the completion and delivery of real estate projects in China, while also repairing market demand expectations during July. Hence, the overall demand dynamics for the plasticizer industry surged the prices of DOP. The production of raw material Phthalic Anhydride by the OX method has increased to meet the growing demand for DOP. Eventually, the supplies of Phthalic Anhydride were sufficient, and the procurement of DOP was primarily driven by the demand within the domestic market. Hence, the cost of raw materials, pushed the production cost of DOP to display a hike.

On the contrary, the Indian market faces a bearish trend within the plasticizer industry to settle within 119 USD/tonne DOP Ex-Mumbai. The ongoing monsoon season anticipated the manufacturers to stock up the product within the domestic market. Hence, despite a surge in the inflation rate in India, enough availability of the product can cater to the demand for DOP from end users’ perspective. The plasticizer industry is extensively driven by the demand for the product, meanwhile, the growing housing assignments in India, influence the prices of DOP to end at a lower note during July amid ample availability of the material restricted the prices to amplify. Moreover, the feedstock phthalic anhydride prices affected the DOP prices to showcase a downturn.

As per ChemAnalyst, with rising costs and a rebound in demand in China may lead the upward momentum of plasticizers including DOP, while the Indian DOP market is likely to remain subdued amid ample stocks availability.