Lead: Raw material octanol prices have fallen, while naphthalene-based phthalic anhydride prices remain firm due to tight supply. DOP raw material trends diverge, limiting cost declines. Meanwhile, market buying support is insufficient, leading to a continuous price drop that is faster than last week.

Divergent raw material trends drive DOP price decline for sales

Raw material octanol prices are accelerating downward, despite scheduled maintenance at some plants, as daily supply remains ample. Shandong octanol prices have fallen to a low of 8,300 yuan/mt, down 500 yuan/mt from last week. DOP market prices have followed the decline of this key raw material, dropping to 9,600 yuan/mt, a decrease of 300 yuan/mt from the previous week.

Currently, inventory levels vary across DOP market regions, but demand is uniformly weak. DOP prices have accelerated downward recently in an effort to boost sales, yet end-users continue to make only small-lot transactions this week, maintaining a hand-to-mouth buying attitude. Downstream users report insufficient new orders, and the downward price trend has fostered a bearish sentiment, resulting in a cautious procurement approach.

Large spread between o-xylene-based and naphthalene-based phthalic anhydride leads to divergent DOP costs

Under the tight supply situation of o-xylene, the price gap between o-xylene-based phthalic anhydride and naphthalene-based phthalic anhydride remains around 1,000 yuan/mt. This has also led to varying cost performances for DOP. Taking May 13 prices as an example, the production cost of DOP using East China o-xylene-based phthalic anhydride as raw material stands at 9,380 yuan/mt, sustaining significant cost pressure. In contrast, the cost of DOP using North China naphthalene-based phthalic anhydride is around 9,011 yuan/mt. However, as naphthalene-based phthalic anhydride prices rise due to tight supply, the price spread between different DOP sources has narrowed from 200-300 yuan/mt to 100-150 yuan/mt.

The o-xylene market has entered a period of concentrated maintenance, with supply shortages continuing to support prices. Naphthalene-based phthalic anhydride, amid an oversold situation, continues to hold firm prices. Although the spread between the two is expected to narrow, the divergent raw material trends mean that the room for further cost concessions in the DOP market is likely to slow down.

Demand-driven, DOP under pressure to sell

From the raw material perspective, the phthalic anhydride market is maintaining firm pricing, while the octanol market has now fallen below cost levels. The lack of profitability may curb further price concessions. Overall, the decline in DOP production costs is moderating.

On the supply side, production in East China has decreased slightly, but supply in other regions remains relatively stable. Existing plant shutdowns are only temporary, and inventory levels are slow to draw down. Furthermore, two new suppliers are expected to enter the DINP market next week, adding to supply. The DOP and DINP consuming markets overlap to some extent, and their prices will influence each other.

From the demand side, new orders from end-users remain weak. Given that DOP is readily available for pickup, buyers will continue to maintain a hand-to-mouth purchasing rhythm.

With the market relying on essential demand transactions, DOP inventory is difficult to move quickly. As the market gradually enters the off-season, DOP will continue to face significant supply-demand pressure. Overall, prices will remain under pressure, with cost changes influencing the magnitude of price fluctuations in the short term.