Lead-in: Rising costs combined with the release of post-holiday restocking demand drove a strong surge in DOTP prices after the National Day holiday. As of now, the mainstream ex-factory price in Zhejiang stands at 10,600 yuan/ton, an increase of 350 yuan/ton compared to pre-holiday levels.
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Following the National Day holiday, international crude oil prices continued to run high, driving the broader chemical sector upward. Upstream raw material propylene prices surged significantly, directly increasing octanol production costs and highlighting the pressure of inverted margins (negative theoretical profits) in the octanol industry. Enterprises continue to face persistent losses.
Additionally, the market rally has boosted sentiment, with bullish psychology rising among participants. Trading activity in the octanol market has improved steadily, allowing prices to rise accordingly. Currently, the spot price for octanol in Shandong has risen to 9,100 yuan/ton, up 150 yuan/ton from pre-holiday levels. The theoretical loss in the octanol industry remains at 355 yuan/ton, indicating that the production deficit has not yet eased. Strong willingness among producers to hold prices continues to support octanol prices at elevated levels.
Overall, upstream octanol prices are holding firm, providing sustained cost-side benefits that offer strong and stable support to the downstream DOTP market, helping DOTP prices trend upward steadily after the holiday.
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Before and during the National Day holiday, geopolitical tensions in the Middle East remained volatile. Significant disagreements in geopolitical negotiations and restrictions on shipping straits acted as dual factors pushing international oil prices higher amid fluctuations. High volatility in the crude oil market led downstream chemicals to follow suit, with core raw material prices rising steadily. Specifically, naphtha rose by 3.67% week-on-week, and PX (paraxylene) increased by 2.64%, forming solid cost support for the PTA market.
Tightening supply further propelled the PTA market upward. Maintenance shutdowns were concentrated, with Zhenhai Refining & Chemical (Zhejiang Petrochemical) shutting down its 2-million-ton feedstock unit for maintenance. Simultaneously, Jiaxing Energy and Dushan Energy collectively halted 4.5 million tons of PTA capacity for planned maintenance. Affected by multiple shutdowns, the domestic weekly operating rate for PTA dropped from 75.10% before the holiday to 72.22%, showing a clear month-on-month decline. This reduction in industry utilization led to a phased contraction in market supply increments, significantly slowing the pace of inventory accumulation. Short-term concentrated maintenance fundamentally altered the PTA supply rhythm, tightening spot circulation volumes and strongly supporting both PTA spot prices and basis spreads. On October 8, the first day after the holiday, the domestic PTA market experienced a sharp jump. Spot prices in East China surged to 7,688 yuan/ton, an increase of 518 yuan/ton compared to September 30 (pre-holiday), representing a single-day gain of 7.22% and reaching a four-year high. Although recent weak demand has raised concerns about expanding inventory buildup and put downward pressure on prices, cost support ensures the market maintains a pattern of fluctuation at high levels.
The overall high-cost environment across the PTA industrial chain provides strong and stable cost support for the DOTP market, driving post-holiday price increases.
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Affected by rising raw material costs, profit margins in the DOTP industry contracted sharply on the first day after the holiday. Using the Zhejiang market as a sample, initial theoretical profits for DOTP enterprises post-holiday were only 55 yuan/ton, a significant drop of 73% from pre-holiday levels, indicating clear pressure on industry profitability. Expectations of rising costs continued to boost market sentiment. Steady recovery in end-user demand, combined with the concentrated release of phase-based restocking by downstream enterprises and short-covering by traders, rapidly warmed up trading activity in the DOTP market, leading to a substantial volume of transactions.
Recovering demand drove strong price increases. Sellers continuously raised quotes, and the magnitude of price hikes significantly exceeded the increase in costs, allowing industry profits to recover quickly. For instance, in the Zhejiang market, DOTP quotes accumulated a total increase of 350 yuan/ton within just three days post-holiday, with the latest quote climbing to 10,600 yuan/ton. As prices continued to rise, industry profitability improved markedly. Current theoretical DOTP profits have rebounded to 236 yuan/ton, completely reversing the sharp profit erosion seen immediately after the holiday. The overall market is running stably with a slightly bullish bias.
Costs remain the core supporting factor for the DOTP market. Recently, new order transactions for PTA have been weak, creating pressure for price loosening due to demand constraints. However, uncertainties persist in the Middle Eastern geopolitical situation. International crude oil is expected to maintain high levels supported by safe-haven buying, keeping the broader chemical sector bullish and providing a floor for PTA prices. Meanwhile, in early-to-mid October, it is difficult for the operating load of the octanol industry—a key raw material for DOTP—to increase significantly. Production cost pressures have not yet eased, and octanol prices are expected to remain firm. This will further consolidate cost support for DOTP, helping the DOTP market maintain a pattern of consolidation at high levels.
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