Lead: At the start of this week, DOTP prices in Zhejiang fell to 7,700 yuan/mt, hitting a new low for 2026. Bargain hunting at low levels spurred a recovery in trading activity. Subsequently, heightened geopolitical tensions pushed up crude oil and chemical feedstock prices. Supported by strengthening costs, trading volumes increased for four consecutive days, and prices rebounded by 500 yuan/mt over five days to reach 8,200 yuan/mt.
Early this week, DOTP in Zhejiang dropped to 7,700 yuan/mt, breaking the pre-conflict level seen at the end of February and touching the 2026 price low. These low levels attracted phase-based inventory replenishment, leading to improved trading of low-priced material in the market.
Several factors supported this bottom-fishing rebound. On one hand, the feedstock n-butanol (Octanol) industry continued to operate at a loss. Market rumors of production cuts and price support measures by plants boosted bullish sentiment among market participants. On the other hand, traders aggressively covered short positions, while downstream buyers replenished as needed. This drove destocking at factories and increased volumes for low-priced material, laying the groundwork for the price uptick. Furthermore, on July 8, geopolitical risks in the Strait intensified, undermining the stability of the US-Iran ceasefire agreement. Concerns arose about potential supply disruptions due to blocked shipping lanes, prompting safe-haven capital to push up crude oil prices. Sentiment in the broader commodity and chemical sectors improved, providing a strong cost-side boost for DOTP. Under the confluence of these bullish factors, DOTP trading volumes stayed elevated for nearly four consecutive days, significantly exceeding the typical replenishment cycle. Downstream buyers continued to chase prices amid plant reluctance to sell, leading to a rapid price surge. Prices accumulated a gain of 500 yuan/mt over just five days, with current DOTP offers in Zhejiang reaching 8,200 yuan/mt. However, this concentrated replenishment wave has lasted three to four days, and downstream willingness to follow high-priced material is now clearly weakening.
At the start of the week, Octanol also fell to pre-conflict lows, with mainstream offers in Shandong at 6,500 yuan/mt. The significant price surge of upstream feedstock propylene early in the week plunged the Octanol industry into deep losses, with per-ton losses reaching as high as 795 yuan/mt, severely suppressing plants' production willingness. Consequently, plants began implementing production cuts and price support measures. According to statistics from Chempricehub, total Octanol output this week was 68,800 tons, down 4,400 tons week-on-week, a decrease of 6%. The weekly average operating rate was 74%, down 5 percentage points from the previous week. The market anticipates further downside potential for operating rates in the coming weeks.
Supported by improved trading activity in the downstream plasticizer market, concentrated procurement of Octanol emerged. Coupled with traders covering short positions, the trading atmosphere for Octanol continued to improve. With supply contraction and concentrated demand release, producer inventories destocked steadily, leading to a bottom-fishing price rebound. Current mainstream offers for Octanol in Shandong have risen to 6,900 yuan/mt. At present, plants are limiting new orders, prioritizing contract customers for supply.
The sustained recovery in Octanol prices provides tangible cost support, effectively boosting overall confidence in the DOTP market and extending both the duration and magnitude of the price uptrend.
Table: Weekly Average Operating Rate Statistics for Octanol and Key Downstream Sectors
| Sector | Current Period | Previous Period | Change | Forecast Next Period | Expected Change |
|---|---|---|---|---|---|
| Octanol | 74% | 79% | -5% | 71% | -3% |
| DOTP | 62% | 60% | 2% | 61% | -1% |
| DOP | 49% | 46% | 3% | 60% | 11% |
| Rough DOTP | 71% | 73% | -2% | 75% | 4% |
Source: Chempricehub
Prices of PTA, another feedstock for DOTP, also trended upward mainly. During the week, Iran tightened controls over Strait shipping lanes, breaking the ceasefire agreement with the US. Market concerns resurfaced about potential supply disruptions due to a possible re-blockade of the Strait. This halted the decline in crude oil prices and initiated a cost recovery, boosting sentiment across commodities and related sectors. Driven by cost factors, PTA prices rose periodically. As of Thursday, PTA settlement price stood at 5,935 yuan/mt, up 310 yuan/mt compared to the previous Thursday, an increase of 5.51%. However, on Friday, some geopolitical risks were perceived to have eased, leading to fluctuating commodity sentiment. PTA prices oscillated with a weakening bias during the day.
From a cost perspective, the core feedstock Octanol for DOTP is currently under significant loss pressure. Producers are proactively cutting production and supporting prices, suggesting there is still upside room for Octanol prices in the short term. Conversely, PTA faces correction pressure as safe-haven sentiment diminishes, dragging crude oil prices lower and weakening the cost support. However, the overall industry supply remains relatively low, and polyester operating rates are stable. The supply-demand balance in the chain is improving, giving PTA strong downside resilience. Therefore, DOTP faces a mixed bag of bullish and bearish factors on the cost side.
On the supply-demand front, end-user demand has not shown a substantial recovery. The recent phase of concentrated stockpiling is gradually coming to an end. Downstream buyers resist high-priced material, and purchasing willingness continues to weaken, significantly constraining upside potential for DOTP prices. Additionally, with considerable profit-taking inventory accumulated in the market, if prices struggle to push higher, traders will likely offer discounts to destock, further limiting price gains.
In summary, bullish and bearish factors for the DOTP market are largely offsetting each other in the short term. Sustained upward momentum is limited. As end-user demand cannot provide effective support, upside potential is constrained. It is expected that prices will maintain a high-level consolidation pattern in the near term. In the medium to long term, there is a risk of a pullback after the price rally.
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