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Asian DOP Prices Remain Downward as Weak Plasticizer Demand Persists
Asian DOP Prices Remain Downward as Weak Plasticizer Demand Persists

Asian DOP Prices Remain Downward as Weak Plasticizer Demand Persists

  • 12-Aug-2024 3:39 PM
  • Journalist: Jung Hoon

The Dioctyl Phthalate (DOP) market in Asia is facing a persistent downturn as the downstream demand from the Plasticizer industry continued to decline during July 2024 and is expected to remain slow in upcoming weeks. A combination of economic uncertainties, geopolitical tensions, and weakened demand has led to the recent bearish market situation of the DOP segment. The Chinese plasticizer market, which heavily influences the DOP industry, has experienced significant downward pressure towards the end of July 2024. The upstream, OPEC basket crude oil prices also dipped to USD 76.58 per barrel further easing the cost pressure on the DOP manufacturers in the week ending August 9, 2024, in the Asian market.

Global economic concerns have weighed heavily on oil market sentiments, impacting petrochemical derivatives, including DOP. Geopolitical developments, such as Israel's commitment to ceasefire negotiations in the Gaza conflict, have alleviated fears of supply disruptions, further contributing to the bearish market sentiment. In China, DOP prices have dropped due to sluggish demand in both domestic and export markets, with the futures market on a prolonged decline. This low-demand season has exerted additional downward pressure on spot prices, compelling producers and traders to offer discounts in an attempt to stimulate sales. The DOP market atmosphere remains tepid, with downstream procurement largely focused on spot prices and limited interest in inquiry-based purchasing.

In Southeast Asia, DOP demand has remained subdued in the Plasticizer industry, with buyers holding off on new purchases as they await price offers for August shipments from a major Taiwanese producer. The seasonal lull, coupled with expectations of decreasing freight rates, has further dampened market activity. Meanwhile, India's DOP market has also seen a decline, with buyers adopting a cautious stance ahead of the upcoming Bureau of Indian Standards (BIS) certification mandate for downstream PVC imports. The combination of weak purchasing activity, easing freight costs, and logistical challenges due to container shortages has further exacerbated the DOP price decline.

The monsoon season in India has added to the sluggish Plasticizer demand for DOP, particularly in the construction sector, where heavy rains have disrupted business activities. The industry remains hopeful for a recovery in demand during the upcoming festive season, but concerns over the BIS certification and the ongoing weakness of the Indian Rupee against the US dollar continue to weigh on market sentiments.

As the Plasticizer market struggles with oversupply and subdued demand, the DOP industry in Asia is likely to face continued downward pressure during August 2024. Market participants are closely monitoring the situation, with hopes pinned on a potential rebound in demand in the coming months.

As per ChemAnalyst, the overall DOP market outlook remains bearish, with downstream plasticizer industry consumptionn expected to remain under downward pressure in the near term.

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