Lead: Both octanol and phthalic anhydride prices are running at high levels, making DOP’s high production costs difficult to reduce. Meanwhile, rising crude oil prices have boosted trading activity. Supported by both transaction volumes and costs, DOP prices have climbed, and mainstream market prices have successively surpassed the 10,000 yuan/ton mark, recovering to the highest levels since May.
Trading and costs alternately drive DOP prices higher step by step
As of September 9, DOP prices in the Jiangsu region had risen to 10,350 yuan/ton, marking the highest level since May. The year's peak occurred in March, when prices briefly touched 10,700 yuan/ton.
This round of gains is mainly driven by higher crude oil and propylene prices, which in turn stimulated buying sentiment among downstream end-users in the DOP market. Since late August, end-users have shown markedly weaker appetite for purchases at high prices, restricting buying to rigid demand. As a result, a relatively concentrated release of transactions emerged in September. Improved trading pushed DOP prices up ahead of feedstock octanol prices. By the time of writing, propylene, o-xylene, and industrial naphthalene prices had all risen, with octanol and phthalic anhydride prices also climbing — phthalic anhydride in particular accelerated. The DOP market has thus begun to receive cost-side support, and mainstream producers have mostly controlled their sales volumes, sustaining the upward price momentum.
DOP profitability recovered for a time, but cost pressure persists
In late August, the DOP market continued to operate at a loss. Taking the Jiangsu market as an example, losses once reached 300 yuan/ton or more. However, in September, DOP prices rose on trading support and increased ahead of feedstock prices, allowing market profitability to gradually turn from loss to profit and recover to 46 yuan/ton. But as of September 9, Shandong propylene prices had risen to 9,900 yuan/ton, while industrial naphthalene prices surged on September 8. Driven by upstream market trends, octanol and phthalic anhydride prices began to rise forcefully. By mid-month, the DOP market still faces high cost pressure.
Outlook
For feedstock octanol, supply is expected to increase, but current feedstock costs are also rising. Merchants are controlling shipment volumes, so prices are still expected to trend upward in the short term. For phthalic anhydride, rising o-xylene and industrial naphthalene prices, together with cost support, point to further upward potential. In terms of supply, DOP capacity utilization is expected to remain around 56% in September, indicating a relatively stable supply situation. However, with both feedstocks rising in price, high DOP costs are unavoidable. In particular, the phthalic anhydride market price needs to be monitored; if profitability continues to decline, the possibility of some units reducing output cannot be ruled out. Likewise, at high price levels, whether downstream end-users will continue to follow up with purchases remains to be seen. Therefore, at the current stage, the DOP market still has support from both costs and transaction data, and prices are expected to continue moving upward.
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