Asian DOP Price Follows a Persistently Bearish Trend Amid Downstream Dullness
Asian DOP Price Follows a Persistently Bearish Trend Amid Downstream Dullness

Asian DOP Price Follows a Persistently Bearish Trend Amid Downstream Dullness

  • 16-May-2024 3:59 PM
  • Journalist: Nicholas Seifield

A persistent downward trajectory in the Dioctyl Phthalate (DOP) market has been observed in April 2024 in the dynamic DOP market, due to sluggish downstream inquiries in Asia. During the ongoing turnaround season, DOP players in China considerably reduced their production rates; nonetheless, in the final week of April 2024, supply still exceeded demand. Average transaction volumes have been the consequence of cautious downstream procurement activity, which has been defined by a predominately wait-and-see attitude and muted downstream plasticizer market sentiments.

A high level of stockpiles combined with low production costs meant that the DOP supply side was still sufficient in the Chinese market. The price of the feedstock phthalic anhydride, decreased by about 0.6% in the Chinese market in April 2024, which further reduced production costs in the DOP market. Finally, concerns about the increased competition caused sentiment to drop to its lowest level in four months. This downward trend reflects the prevailing bearishness in Asian DOP markets. However, concerns have been raised by some sellers regarding the sustainability of this price reduction strategy in light of the easing upstream crude oil costs, as a result, DOP prices were dipped by the regional players for the time being.

Due to the significant availability of DOP in the local market, buyers are expecting additional price reductions. Observations suggest that the Taiwanese major may find challenging to sell all of its May quotations even with the price modifications. The Taiwanese major's decision to lower prices despite a noticeable increase in freight rates highlights this outlook and indicates the general pessimism in the regional market.

A maintenance turnaround was conducted at LG Chem Ltd. in Daesan, SeaosanKun, Chungchongnamdo, South Korea, in April 2024. This tightened the supply chain for the country's plasticizer industry and reduced DOP trade activity. Further from the downstream demand perspective, concerns persist regarding weak demand in the region, characterized by slowing orders for DOP and low production levels. In the Southeast Asian DOP market, a similar scenario prevails, with sellers open for bidding and offering discounts to stimulate demand amidst sluggish market activity in the region.

As per ChemAnalyst, the DOP prices are expected to decrease in May 2024, due to low downstream plasticizer demand and adequate supplies in the line of ease in the upstream costs. Anticipated ongoing fluctuation and consolidation within a specific range in the DOP spot market shortly along with the cautious downstream procurement sentiments in the Asian market.

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