Lead-in: In the third quarter, the domestic DOTP market rebounded from its bottom. Prices dropped to pre-conflict lows before rapidly recovering and oscillating upward into the range of wartime highs. The pace of price increases during this off-season significantly exceeded market expectations. As of September 23, the quarterly average DOTP market price was RMB 9,157/ton, a decrease of RMB 144/ton (down 2%) compared to the second quarter. The theoretical profit margin for the product recovered, rising by RMB 112/ton quarter-on-quarter.
Table 1: Key Indicators of the Domestic DOTP Market in Q2/Q3 2026 (RMB/ton, 10,000 tons)
| Indicator | Q3 2026 | Q2 2026 | Change | % Change |
|---|---|---|---|---|
| Average Price (Zhejiang) | 9,157 | 9,301 | -144 | -2% |
| Gross Profit (Zhejiang) | 145 | 33 | 112 | 339% |
| Output | 52.5 | 52.9 | -0.4 | -0.76% |
Data Source: Chempricehub Information
The DOTP market rebounded from its bottom in the third quarter. According to statistics from Chempricehub Information, taking the Zhejiang region as an example, the quarterly average DOTP market price for Q3 2026 stood at RMB 9,157/ton as of September 23, down RMB 144/ton or 2% compared to Q2. The highest point within the quarter occurred on September 14 at RMB 10,700/ton (ex-works), while the lowest point was recorded on July 2 at RMB 7,700/ton (ex-works), resulting in a spread of RMB 3,000/ton between high and low ends.
(Figure 1 and Figure 2 omitted)
This quarter, the DOTP market experienced wide-range fluctuations characterized by probing the bottom, surging, and finally retreating from highs. The core drivers were raw material costs and the geopolitical situation. Volatility in the supply and prices of raw materials—specifically n-octanol and PTA—provided the underlying support for this quarter's market trends. Combined with repeated disruptions to international crude oil prices due to geopolitical events, market sentiment shifted rapidly, triggering phased buying rallies. During periods of heightened geopolitical risk, crude oil rose as a safe-haven asset, strengthening the chemical sector. N-octanol and PTA prices increased simultaneously, significantly improving DOTP cost fundamentals. Traders concentrated on covering short positions, downstream buyers engaged in opportunistic restocking, and holders became reluctant to sell, pushing prices up continuously. This upward cycle lasted over two months, reaching year-to-date highs. However, lacking strong terminal demand support, downstream buyers showed little willingness to chase prices at these year-to-date highs. By the second half of September, transactions at high DOTP prices began to fade.
At that time, signs of easing geopolitical risks emerged. Crude oil prices fell, dragging down raw material costs and weakening cost support. Coupled with low willingness for pre-holiday stockpiling among downstream buyers, purchasing activity turned cautious. Some holders and manufacturers sought to realize profits and actively offered discounts to move inventory, leading to an increase in low-priced DOTP supply and a gradual decline in the price center. Overall, this quarter's DOTP volatility relied more on external news and cost drivers than on solid terminal essential demand. Market transactions consisted mostly of phased restocking and essential orders; buyer follow-through weakened at high price levels, causing pressure after the initial surge.
Total domestic DOTP output in Q3 2026 was 525,000 tons, a decrease of 4,000 tons (-0.76%) compared to Q2, but an increase of 49,000 tons (+10.29%) year-on-year compared to Q3 2025. This quarter marked the transition from the traditional off-season to peak season for terminal demand, exhibiting characteristics of "not so quiet" off-season and "not so busy" peak season. For most of July and September, the DOTP industry maintained profitability, and combined with low prior inventories, this boosted factories' production and operating willingness to some extent. However, upstream raw material n-octanol entered a concentrated maintenance period, shrinking spot supply and placing obvious constraints on further DOTP production increases. Additionally, the recovery pace of terminal demand fell short of expectations, limiting improvements in industry operating rates.
On the demand side, although July was traditionally an off-season, the initial rise from low prices triggered a "buy when rising" mentality, prompting moderate position building by downstream users and traders. Overall transaction performance was acceptable, providing some support for driving DOTP market prices up. Entering the second half of September, despite the arrival of the traditional peak season, the retreat from high prices highlighted the "buy when rising, not falling" mentality. Downstream buyers became cautious, active purchasing intent cooled, and the trading atmosphere within the DOTP market faded. The previous tightness in spot supply gradually eased, and industry inventory trends shifted from destocking to accumulation.
(Figure 3 and Figure 4 omitted)
Overall, Q3 DOTP output grew significantly year-on-year, but expansion space was limited by upstream raw material maintenance. The demand side did not see substantial volume increases typical of a peak season, releasing only phased procurement needs. By the end of the quarter, downstream wait-and-see sentiment intensified, and industry inventory pressure rebounded slightly.
In Q3 2026, profit margins in the domestic DOTP industry improved notably, with profitable phases concentrated in July and September. Taking the Zhejiang market as an example, the average theoretical DOTP profit for the quarter was RMB 145/ton, an increase of RMB 112/ton (up 339%) compared to Q2, and an increase of RMB 218/ton year-on-year compared to Q3 2025, marking a shift from loss to profit.
(Figure 5 and Figure 6 omitted)
Throughout this quarter, persistent geopolitical disturbances caused international crude oil fluctuations, lifting the entire chemical sector. Strong market expectations for upstream raw material price hikes preemptively boosted bullish sentiment in the DOTP market, serving as a key driver for this round of price increases. Stimulated repeatedly by geopolitical news, speculative buying atmospheres were thick. Spot DOTP prices saw multiple significant rises, with increases often exceeding those in raw material costs, leading to sustained recovery in theoretical industry profit margins.
However, the rally lacked strong support from terminal essential demand. As DOTP prices rose, transactions at high spot levels struggled. Mainstream market transactions remained concentrated in earlier low-price ranges. Factory shipments primarily involved fulfilling previous low-price orders, while downstream acceptance of high-priced goods was low. Follow-through on new high-priced orders was weak, making it difficult to release incremental orders.
Overall, this quarter's DOTP market trend and profit recovery relied more on speculative sentiment driven by external news than on substantive improvement in terminal demand. Insufficient essential demand also limited the sustainability of high-price rallies. Once bullish expectations cooled, transactions for high-priced inventory weakened rapidly.
Looking ahead to Q4, the domestic DOTP market is expected to show phased recovery, with trends likely starting strong and then weakening.
From the demand perspective, with the arrival of the traditional peak season, there is an expectation for gradual recovery in downstream demand, which could provide continuous essential demand support for the DOTP market. However, current improvements in demand are limited. Downstream enterprises show little willingness to chase high DOTP prices, preferring opportunistic restocking during dips. This status quo will continue to limit DOTP price surges.
Cost-side differences are significant across phases. In October, core raw material n-octanol faces expected unit maintenance, potentially keeping industry operating rates low and maintaining tight spot supply conditions. Additionally, geopolitical impacts may keep crude oil prices running high, supporting elevated chemical product prices and providing cost support for DOTP, helping it consolidate at high levels. However, from late October through December, previously maintained n-octanol units will restart sequentially, steadily increasing market supply. Furthermore, if conflicts ease later, combined with the restart of n-octanol maintenance units, growing supply expectations could drag down n-octanol prices. DOTP cost support would subsequently weaken, pressuring the market trend.
In summary, the Q4 DOTP market presents a tug-of-war between peak-season demand recovery and cost support shifting from strong to weak. Overall prices are likely to rise before falling back. Special attention should be paid to changes in the geopolitical situation to guard against rapid shifts in crude oil sentiment impacting prices.
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