Introduction: Since March 23, the national DOTP market price has firmly held above the 10,000 yuan/ton mark, with prices operating above this level for nearly a month. As of April 23, DOTP market quotations have fully fallen back below 10,000 yuan/ton. Insufficient follow-through from end-user demand and a persistently weakening demand side have dragged prices downward. As prices corrected, the earlier high-profit advantage of the DOTP industry has dissipated, with market prices gradually approaching production costs. Taking Zhejiang region as an example, the theoretical profit for DOTP enterprises has currently dropped to 42 yuan/ton.

I. Weak Sales of Raw Material Octanol Weaken DOTP Cost Support

Recently, the domestic octanol market has been under increasing pressure, with the price center steadily moving downward. From the demand side, the overall transaction performance of the downstream plasticizer industry has been lackluster, and industry profit margins continue to shrink. This has significantly cooled enterprises' purchasing enthusiasm for octanol, slowed their procurement pace, and resulted in notably insufficient just-in-time demand support, further exacerbating the market's bearish atmosphere.

Negative factors from the supply side are also emerging simultaneously. According to a survey and forecast by chempricehub, next week, the operating rate of domestic octanol plants is expected to steadily recover, with the average weekly capacity utilization rate projected to increase to 95%, a rise of 12 percentage points month-on-month. This implies a stronger expectation of increased market supply, gradually intensifying supply pressure. Meanwhile, the operating rates of downstream plasticizer industries are showing significant divergence: the DOTP operating rate is expected to rise by 3% week-on-week, while the operating rate of another major downstream product, DOP, is forecast to fall by 4%. Overall, demand performance in the plasticizer industry remains lackluster, making it difficult to effectively absorb octanol, further increasing the sales pressure for octanol spot goods.

As the May Day holiday approaches, market participants are generally focusing on pre-holiday destocking and capital recovery. Production enterprises and traders have a strong willingness to reduce prices to sell goods. Low-price sources continue to circulate in the market, constantly impacting high-end quotations, leading to significant obstacles in concluding high-price transactions. Overall, under the superposition of multiple negative factors such as weak demand, expected supply recovery, and profit-sacrificing sales by market players, octanol prices are under pressure and declining. As of now, the octanol market price in Shandong has dropped to 8,900 yuan/ton, a decrease of 300 yuan/ton from Monday, or a 3.26% decline.

Affected by the weakening of octanol prices, cost support for DOTP is notably insufficient, and market sentiment is bearish. Market participants have diminished confidence in the future outlook, and procurement has become more cautious, further creating negative guidance for DOTP's own prices.

Table: Expected Changes in Average Weekly Capacity Utilization of Octanol and Major Plasticizers

| Product | Current Week Operating Rate | Next Week Operating Rate Expectation | Change Value |
|---|---|---|---|
| Octanol | 83% | 95% | 12% |
| DOTP | 66% | 69% | 3% |
| DOP | 58% | 54% | -4% |

Source: chempricehub

II. Bearish Market Sentiment; DOTP Sellers Actively Offer Concessions to Secure Orders

In March, driven by strong oil price increases due to tensions in the Middle East, and coupled with end-user enterprises still having pending pending orders from earlier periods to fulfill, downstream players actively followed the upward trend in raw material prices. DOTP market demand remained stable with just-in-time purchases, and prices operated mainly at high levels.

However, entering April, the market landscape reversed significantly: end-user industries mostly completed deliveries of their earlier orders, while new order volumes plummeted due to previous high prices. This caused a sharp drop in downstream enterprises' purchasing enthusiasm for DOTP, significantly weakening just-in-time demand support. Additionally, early in the week, Iran announced that commercial vessels would be allowed to pass through the Strait of Hormuz during the ceasefire period, alleviating supply concerns and causing oil prices to fall simultaneously. This further pushed market sentiment from bullish to bearish, making DOTP buyers even more cautious.

As favorable factors from the cost side gradually weakened and demand-side rejection of high prices became apparent, DOTP market sentiment turned bearish. Traders proactively lowered prices to unload inventory. Production enterprises, lacking confidence in the future outlook and facing pressure from sluggish sales, were forced to lower quotations to stimulate transactions, forming a vicious cycle of "sentiment shift - price cuts for destocking - price decline." Some merchants, in an attempt to capture market share, further adopted low-price competition strategies, continuously pulling down the overall market quotation level and exacerbating the price decline.

Although new peace talks in the Middle East have not yet resumed later on, shipping through the Strait of Hormuz remains at a standstill. The supply-side risk provided some support for oil prices to rebound, but this failed to boost confidence among players in the plasticizer industry chain. Dragged down by persistently weak demand, the prices of octanol and DOTP showed a synchronous downward trend. In the Zhejiang region, the mainstream ex-warehouse quotation today fell to 9,750 yuan/ton, a decrease of 200 yuan/ton from Monday, or a 2.01% decline. Enterprise profit margins have also fallen to low levels. Taking Zhejiang as a sample region, the theoretical profit for DOTP today stands at 42 yuan/ton, a 91% drop compared to early April, and has recently been hovering around the cost line.

III. Future Market Forecast

From the cost perspective, the raw material side for DOTP presents a mixed picture of positives and negatives. On the negative side, the operating load for the core raw material octanol is expected to increase next week. However, current market transaction follow-through is weak, and sales pressure is gradually mounting. Prices are therefore expected to have room to decline, weakening cost support for DOTP. On the positive side, the other raw material, PTA, continues to see expectations of reduced supply. Coupled with external support from uncertainties in the Middle East situation, the cost floor remains somewhat intact, and PTA prices are likely to operate with a firm bias in the future. Overall, there is a clear tug-of-war between bullish and bearish factors on the raw material side.

From the supply-demand perspective, the demand side continues to constitute a negative factor. Downstream end-user demand remains weak with no significant sign of recovery. Market sentiment for the industry's future is bearish, with procurement mainly based on immediate needs, and overall buying enthusiasm is low. The supply side is also emitting negative signals: there is an expectation of increased DOTP plant operating rates. Nearing the holiday, manufacturers and traders are primarily focused on destocking and moving goods, showing a strong willingness to sell and an obvious mentality of proactively offering concessions to secure orders, which further increases market supply pressure.

In summary, short-term negative factors dominate the DOTP market: cost-side divergence leads to varying influences, the demand side continues to drag down, and supply-side pressure increases. It is expected that the domestic DOTP market will operate in a stable but weak manner in the near term, with high-priced goods facing significant downward pressure.