Q2 DOTP: Prices retreated from elevated levels, profitability continued to contract.

Introduction: In the second quarter, DOTP market prices declined from a high level, hitting a new two-year high. Affected by the situation in the Middle East, DOTP prices rebounded strongly, breaking away from the influence of supply and demand fundamentals. As of now, the average quarterly price of the DOTP market is referenced at 8,664 yuan/ton, up 1,574 yuan/ton from the fourth quarter, an increase of 22%. Profits turned from loss to profit, up 349 yuan/ton year-on-year.

Table 1 2026 Q2 Domestic DOTP Market Key Indicators (yuan/ton, 10,000 tons)

Source: chempricehub Information

I. Geopolitical Situation Gradually Eases, DOTP Prices Fall from Highs

In the second quarter, the DOTP market experienced a surge followed by a decline, with a downward trend overall. According to statistics from chempricehub Information, taking the Zhejiang region as an example, as of now, the average quarterly price of the DOTP market in Q2 2026 is 9,366 yuan/ton, up 702 yuan/ton or 8% year-on-year from Q1. The highest point in the quarter appeared on April 7, at 10,400 yuan/ton ex-warehouse; the lowest point appeared at the end of June, currently at 8,100 yuan/ton ex-warehouse, with a spread of 2,300 yuan/ton between the high and low.

In Q2 2026, the DOTP market in Zhejiang showed a weak trend of surging in early April, followed by a continuous volatile decline. The overall market was dominated by geopolitical crude oil, raw material fluctuations, and weak season demand gameplay. Market transactions were cautious, sentiment was heavy with wait-and-see, and corporate profitability continued to be under pressure. April was the only month of increase in this quarter. Mid-month tensions in the Middle East drove up crude oil, octanol, and PTA prices. Cost benefits pushed DOTP prices to a high of 10,400 yuan/ton, but end-user demand was weak, and high-price transactions struggled. Subsequently, the situation eased, oil prices fell, raw material support loosened, coupled with pre-May Day holiday supplier concessions to clear inventory, the price center continued to move down, compressing corporate profits.

May-June market continued to weaken, with the decline gradually deepening. Affected by falling crude oil and raw material prices and the off-season effect, it turned into a unilateral decline. Although octanol production cuts provided a brief floor, it was difficult to change the weakness, and industry profits continued to shrink. Short-term cost benefits within the month only supported a slight rebound. Geopolitical easing, raw material price drops, coupled with insufficient terminal orders and weak essential demand, led to an increase in low-priced goods in the market in late June, expanding the market decline, and corporate profits turned from positive to negative. Overall, in Q2, terminal demand remained persistently weak, raw material benefits were all phased pulses without long-term support, and the market maintained a weak and stalemate operational trend throughout.

II. DOTP Supply Increases

In Q2 2026, total domestic DOTP output was 532,000 tons, an increase of 46,000 tons or 9% compared to Q1; an increase of 56,000 tons or 12% compared to Q2 2025. In April-May, the industry maintained profitability for most of the period, with strong production willingness among enterprises, keeping overall supply high. Entering June, downstream gradually entered the traditional demand off-season, terminal essential demand contracted significantly, coupled with the industry turning from profit to loss, manufacturers' production enthusiasm decreased, and plant operating rates dropped markedly.

Overall, Q2 DOTP saw a significant release of overall supply. Phased profitability drove higher operating rates in the first half of the year, but under the dual impact of weak seasonal demand and production losses at the end of the quarter, industry operating rates fell rapidly. The supply-demand mismatch was prominent throughout the quarter. Excess pressure continued to suppress market trends, and inventory accumulation further increased resistance to spot price declines.

III. Demand Drags, DOTP Corporate Profits Gradually Shrink

In Q2 2026, the profitability space of the domestic DOTP industry gradually declined, turning from profit to loss in June. Taking the Zhejiang market as an example, the average theoretical profit for DOTP in this quarter was 43 yuan/ton, down 289 yuan/ton or 87% from Q1; down 44 yuan/ton or 51% year-on-year from Q2 2025.

In April, terminal enterprises had accumulated orders from earlier periods to deliver, supporting DOTP essential procurement, and the industry maintained reasonable profit margins. Starting in May, the downstream industry gradually entered the traditional demand off-season. New orders for terminals dropped significantly, and DOTP market demand remained persistently weak. After demand support weakened, on-site shipping pressure increased, competition among enterprises for low-price sales intensified, and the profit space of the DOTP industry was continuously compressed. Entering June, the market weakness further intensified. The industry was caught in a loss-making state for most of the period, significantly increasing corporate production and operation pressure.

Overall, DOTP industry profitability declined month by month in Q2, turning from profit to loss at the end of the quarter. The contradiction between overall supply and demand was prominent. High production volume in the early stage combined with off-season demand drag in the later stage caused industry profits to shrink continuously. The loss-making pattern at the end of the quarter was evident, with overall industry profitability significantly weaker than Q1 and the same period last year.

IV. Future Outlook

Looking ahead to July-September 2026, the domestic DOTP market is still in the downstream traditional demand off-season cycle. The weak fundamental pattern of the industry is difficult to reverse in the short term, and the overall market is expected to maintain a volatile and weak operational trend. Among them, July-August is the depth fermentation stage of the traditional demand off-season. The downstream plastic products industry is affected by both high temperatures and weak end-consumption. Overall operating rates remain low, enterprises have difficulty following up with new orders, the pace of essential market procurement slows down, and purchasing attitudes are cautious, forming continuous pressure on DOTP spot prices. The overall support from the demand side is insufficient, which will become the core factor dragging down prices.

On the cost side, there is also phased bearish pressure. As the geopolitical situation in the Middle East gradually eases, regional shipping and crude oil supply order steadily recovers, and the center of gravity of international crude oil prices shifts downward with volatility, driving the entire chemical industry chain to weaken. Affected by this, prices of core raw materials upstream of DOTP, such as octanol and PTA, are under pressure and falling. Cost support continues to loosen, further amplifying the weak DOTP market. The market lacks substantive positive drivers in the short term.

Entering September, the downstream traditional off-season will gradually end, and the industry's fundamentals are expected to see marginal improvement. As high temperatures subside, the willingness of downstream enterprises to start operations gradually recovers. There is an expectation of replenishment demand recovery in the market. The pace of recovery in terminal orders will become the core observation indicator for later market trends. Overall, the DOTP market in the next three months will show a phased divergent trend. In July-August, under the dual bearish influence of off-season demand and weakening costs, prices will face downward pressure, and the weak pattern is clear. In September, with the easing of the off-season and recovery of demand, the downside space for the market will narrow somewhat, and the market may receive phased support.