Introduction: From May to June, new production lines for DINP were gradually added. However, due to weak demand, market output actually decreased instead of increasing. By July, market capacity stabilized. Driven by the rebound in crude oil prices, trading picked up, and combined with rising feedstock prices, prices climbed to high levels, while supply also showed an increase.
Capacity Increase vs. Demand Impact: DINP Supply First Declines Then Rises
From May to June, a total of five new production lines for DINP were added. In July, DINP market capacity stabilized at 722,000 tons. However, due to tight feedstock supply in South China during May and June, regional plant operating rates declined. Although capacity increased, actual output saw a slight decrease, with average monthly output around 35,000 tons. Downstream demand was insufficient and buying interest was limited, but there was still inventory available in the market. May and June were also a period of destocking. In July, feedstock supply recovered, and multiple DINP production lines returned to normal operation. Market supply increased slightly, with monthly output expected to recover to around 45,000 tons.
Both Feedstock Prices Rose, DINP Followed Suit with Firm Pricing
In June, market demand was insufficient, with end-users mostly keeping empty positions and replenishing only on a need-to basis. DINP prices fell rapidly. Since product prices fell faster than cost prices, market profit margins declined significantly in June, with average monthly profit dropping to 109 yuan/ton, a decrease of 296 yuan/ton month-on-month.
By July, geopolitical changes drove a rebound in crude oil prices, coupled with a sharp rise in propylene prices, which triggered low-price replenishment sentiment among end-users. Low-price trading improved, and prices stopped falling at 7,950 yuan/ton, subsequently supporting a rebound in DINP market prices to high levels. Profit margins recovered appropriately. As of July 16, the average profit was around 119 yuan/ton. However, this upward movement was mostly driven by upstream price increases, with no significant improvement in end-user demand. Demand support remained weak, and after two weeks of trading, downstream users had mostly secured orders for use.
Price Adjustments Will Return to Supply-Demand Fundamentals
From a feedstock perspective, octanol prices support high isononyl alcohol prices, while ortho-phthalic anhydride inventory is low. After this rebound, there may be a period of high-level consolidation, with price concessions likely to appear later. In the short term, the DINP market will still face cost pressure, and profit margins will remain narrow.
After two weeks of trading, end-users mostly have inventory available, and new order buying is expected to gradually return to a need-to-purchase level. Support from new orders may be somewhat insufficient. Therefore, although spot supply in East China is currently tight and there are queues for shipment, as buying interest weakens, the tight supply situation will gradually ease. DINP output is still expected to increase slightly in July-August. In the long run, price adjustments will return to supply-demand fundamentals, and after high-level consolidation, market prices still have a downward expectation.
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