Lead: In just three working days after the May Day holiday, the domestic DOTP market experienced a rise followed by a decline, with the market rapidly weakening. On the one hand, raw material cost support gradually cooled; on the other hand, downstream transaction follow-up was weak and lacked sustainability, putting pressure on spot prices and causing them to loosen. The industry's profitability remained depressed, with theoretical losses persisting for enterprises. Taking the Zhejiang region as an example, theoretical losses for DOTP producers currently stand at 22 RMB/tonne.

1. Octanol Transaction Activity Fades, Price Upside Under Pressure

During the May Day holiday, the price of the raw material propylene rose sharply, directly pushing up the production cost of octanol and significantly exacerbating cost pressure in the industry. After the holiday, octanol enterprises generally fell into losses. On May 6th, the theoretical loss for octanol in the Shandong region reached 186 RMB/tonne.

Dragged down by high costs, some octanol enterprises chose to shut down for maintenance or plan maintenance. The industry's operating rate fell back to 82% on that day, easing the pressure on spot circulation and sales. Simultaneously, amid repeated geopolitical tensions and high international crude oil prices, market sentiment was effectively boosted, and the speculative atmosphere in the industry heated up. In the early post-holiday period, octanol transaction volumes increased, and prices followed the upward trend.

However, subsequently, news emerged that the US and Iran planned to reach a truce memorandum agreement, easing geopolitical tensions. International crude oil prices fell sharply in response, turning the external market outlook bearish. At the same time, propylene prices weakened synchronously, further loosening the cost support for octanol. Downstream buyers became cautious about purchasing high-priced goods, market transactions fell into a standoff, the upward price momentum was hindered, and prices even faced downward pressure. Cost support for DOTP turned from positive to negative.

2. Cost Guidance: PTA Prices Surge Then Fall

Another raw material, PTA, showed a relatively strong start after the holiday. Affected by repeated geopolitical tensions, both the cost and supply sides improved simultaneously. On the one hand, maintenance on several units came into effect; on the other hand, upstream supply tightened further. This drove PTA prices to open low and rise high, with the spot price of PTA rising to 6,955 RMB/tonne that day.

Subsequently, as US-Iran tensions eased, market concerns about supply diminished. Combined with the sharp decline in international crude oil prices, cost support weakened significantly. Overall commodity market sentiment was under pressure, dragging PTA prices into a rapid correction. Over the past two days, PTA prices have shown a continuous decline. As of now, the spot price of PTA has fallen to 6,570 RMB/tonne, a decrease of 385 RMB/tonne from May 6th, a drop of nearly 6%. This has created bearish pressure on the DOTP market from the raw material cost side.

3. DOTP Enterprise Loss Pattern Persists

From the end of April before the holiday until now, the profitability of DOTP enterprises has shifted from profit to loss, remaining in a loss state for the past ten days. In the early post-holiday trading period, although DOTP prices temporarily rose in tandem with raw material costs, this did not reverse the industry's loss situation. Taking the Zhejiang market as an example, on May 6th, the theoretical loss for DOTP enterprises reached 120 RMB/tonne. Recently, the decline in raw material PTA prices has further widened. However, the magnitude of the DOTP price decline was smaller than the drop in costs. Although the theoretical industry loss has narrowed slightly, it still stands at a loss of 22 RMB/tonne. The fundamental profitability situation has not yet shown substantial improvement.

At the current stage, market demand is lackluster. End-user demand is insufficient to support basic consumption, transaction follow-up is weak, and lacks sustainability. The two-way tug-of-war between costs and demand has become the core factor dragging the DOTP industry into losses. At current price levels, downstream procurement acceptance is low, and the industry continues to operate under pressure. Overall, the weakening cost support combined with sluggish demand means that enterprises lack the impetus for profit recovery, with no clear signs of improvement in the short term.

4. Future Market Outlook

From the cost perspective, the high-price transaction volume for octanol, the core raw material for DOTP, is gradually fading. Coupled with declining costs, the market center of gravity is expected to face downward pressure. However, the current cost pressure in the industry is difficult to resolve quickly in the short term. Coupled with production enterprises' strong willingness to cut output and support prices, this may limit the downside for octanol prices. Regarding the other raw material, PTA, the market is concerned about the gradual return of upstream supply. Additionally, the traditional off-season for end-users is approaching, and demand is weakening. The destocking pace of hidden social inventories is relatively slow, exerting some bearish pressure on the market. Nevertheless, geopolitical frictions in the Middle East persist. Moreover, the number of PTA units under maintenance is increasing, tightening the supply side, which provides periodic support for prices. Consequently, the subsequent decline is expected to narrow.

On the supply and demand front, the overall supply of the DOTP market is increasing steadily. However, end-user demand has not shown a real recovery, with downstream mainly replenishing based on essential needs. The earlier trend of some enterprises having order backlogs is gradually easing. The industry's inventory has started to show accumulation pressure, further weighing on the DOTP market trend.

In summary, the current cost support for DOTP is continuously weakening. End-user demand follow-up is insufficient, with no signs of recovery. Amid the interplay of positive and negative factors, the market outlook for DOTP prices is clearly under pressure. The DOTP market is expected to fluctuate weakly in the short term. However, constrained by raw material costs, the potential for a deep price decline is limited.