Introduction: Since the second half of 2021, DOTP was the first to face overcapacity pressure, followed by a gradual shift into oversupply in key segments of the industrial chain such as octanol. The supply-demand imbalance led to a sustained downward trend in the industrial chain from late 2024 to early 2026. However, in March of this year, the Middle East situation escalated abruptly, with geopolitical conflicts raising concerns about tight crude oil supply, driving an overall uptrend in the chemical market. Ultimately, the oversupply in the industrial chain was overshadowed by external sentiment, leading to a strong rebound in DOTP and octanol prices, which broke through near two-year highs and reversed the industry's downward trajectory.

I. Oversupply in the Industrial Chain

Since the second half of 2024, the expansion of octanol capacity has accelerated significantly. By the end of 2025, the designed capacity of octanol had increased from 2.47 million tons at the end of 2023 to 3.725 million tons, a rise of nearly 51%, with approximately 515,000 tons added in 2025 alone. However, the capacity growth of its main downstream products, DOP and DOTP, has been relatively limited, increasing by 130,000 tons and 50,000 tons, respectively, indicating a clear mismatch in the expansion cycles between upstream and downstream segments.

The DOTP industry experienced concentrated capacity expansion during 2020–2021, driven by the pandemic and environmental policies. Subsequently, as overcapacity gradually became apparent, the pace of expansion slowed significantly from 2022 to 2026, with a compound annual growth rate of only about 1% over the past five years. DOP, constrained by environmental policies, has also seen a low expansion rate, with a compound annual growth rate of just 1.54% over the past five years. In contrast, the expansion pace of octanol has severely diverged from downstream demand: the octanol market remained in a tight supply situation from 2020 to 2023, but capacity expansion accelerated comprehensively from 2024 onward, gradually shifting into an oversupply phase by 2025. Under multiple pressures, including sustained industry supply easing, a weak macroeconomic environment, and slower growth in terminal consumption compared to capacity expansion, octanol prices have generally trended downward. The DOTP market, affected by its own oversupply and cost-side pressures, has also seen prices predominantly decline.

Particularly during the 2026 Spring Festival holiday, the operating rates of DOTP and DOP industries dropped significantly, with DOP capacity utilization falling to around 45% and DOTP operating rates as low as 26%. Meanwhile, the operating rate of raw material octanol units once reached as high as 99%, indicating a severe mismatch in upstream and downstream operating loads. This situation directly led to a rapid accumulation of inventory among octanol producers after the holiday, putting continuous downward pressure on market prices. With cost-side factors dominating, DOTP prices also trended downward in February after the holiday.

II. Impact of the Middle East Situation: Strong Rebound in DOTP Prices

March 2026 marked a critical turning point in the market. On February 28, Israel launched a military strike against Iran, abruptly escalating the geopolitical situation in the Middle East and directly triggering risk-aversion sentiment in the global energy market. As a critical choke point for global oil transportation, the Strait of Hormuz plays an extremely vital role in shipping. This conflict heightened concerns about the safety of shipping through the strait, amplifying potential risks to global crude oil supply. Driven by geopolitical risk premiums, international crude oil prices quickly surged to high levels and consolidated, lifting prices across the chemical market. Following the strong guidance from upstream raw materials, DOTP prices experienced a sharp rally. On March 24, prices in East China once rose to 10,700 yuan per ton, surpassing the highs seen since the second quarter of 2024.

This round of significant price fluctuations in DOTP has exhibited typical sentiment-driven characteristics, with market movements largely detached from traditional supply-demand fundamentals, showing wide and volatile swings. The core driving logic of the market has temporarily shifted, with price trends highly tied to fluctuations in international crude oil prices and the evolution of geopolitical situations. Sentiment transmission from upstream costs has become the dominant factor influencing DOTP market dynamics.

III. Future Outlook

On the cost side, the current Middle East situation holds expectations for further escalation, with international oil prices maintaining a strong trend and the overall chemical market consolidating at high levels. As a core raw material for DOTP, the octanol market is supported by contract and export orders, and prices are expected to remain high with fluctuations. Another major raw material, PTA, faces strong expectations of reduced supply, with a noticeable slowdown in the pace of social inventory accumulation. Coupled with favorable support from the cost side, PTA prices are also expected to remain relatively strong. Overall, the cost side of DOTP has solid favorable support.

On the supply-demand side, the DOTP market currently exhibits a clear game between supply and demand. Downstream industry demand lacks strong momentum for improvement, with limited acceptance of the current high prices. New order purchases are mostly based on rigid demand, and resistance to high-price transmission persists, resulting in weak demand-side pull on the market. On the supply side, DOTP producers currently face no significant inventory pressure. Combined with the high uncertainty of the Middle East geopolitical situation, producers have little willingness to actively offer discounts, effectively underpinning the market against lower prices.

Considering both cost and supply-demand factors, the short-term game between cost support and weak demand in the DOTP market is quite intense, with clear constraints on both upward and downward price movements, leaving limited room for significant fluctuations. Against the backdrop of no substantial easing in geopolitical conflicts and no significant weakening of support from crude oil and raw materials, the bottom price of the DOTP market has strong support. It is expected that DOTP market prices will consolidate at high levels in the short term, with close attention to the evolution of the geopolitical situation, trends in international oil prices, and the follow-through of downstream demand.