Preface: The DOP market price surged in March, then fluctuated downward from a high level in the second quarter. However, looking at the average price, the average price in the Jiangsu market in the second quarter was 9,665 yuan/ton, an increase of 14.58%, but the profit level showed a significant decline. During the quarter, the number of plants that were shut down or had reduced production increased significantly to avoid high cost and high inventory pressure.

I. High Prices Met Resistance, DOP Fluctuated Downward

As of June 16, the average DOP market price in Jiangsu in the second quarter was 9,665 yuan/ton, up 14.58% quarter-on-quarter and 18.52% year-on-year. The market price peak appeared at the beginning of the second quarter at 10,500 yuan/ton. The current low is around 9,000 yuan/ton. As the downtrend has not yet stopped, the low point for the quarter is expected to be refreshed.

The sudden geopolitical conflict at the end of the first quarter drove the DOP market up rapidly. Entering April, upstream raw materials remained in a high range, and the DOP market opening price rose simultaneously. After two months of high-price operation, the cost pressure on the downstream industrial chain intensified. The high prices were difficult to pass downstream, market transactions continued to weaken, enterprise inventories accumulated, and the market turned into a downward fluctuation channel.

During this period, supported by the high international crude oil price, the cost difference between ortho-xylene-based phthalic anhydride (OX-PA) and naphthalene-based phthalic anhydride (N-PA) continued to widen, leading to significant divergence in DOP production costs within the industry. Low-cost DOP continued to emerge in the circulating market. At the same time, DINP production capacity was released, and the circulation volume increased significantly, forming direct substitution competition with DOP in downstream end-use applications, further suppressing the recovery of DOP demand.

In mid-June, as the geopolitical situation eased, international crude oil prices fell sharply. The market’s bearish sentiment intensified collectively. The already sluggish end-user procurement willingness was further dampened, accelerating the decline in DOP prices. There is still room for the market low to drop further in this quarter.

II. Profit and Supply Both Declined

In the second quarter, the average DOP market profit was 138 yuan/ton, down 51.06% quarter-on-quarter but up 64.29% year-on-year. The market profit level was relatively good in May, as octanol prices provided concessions, while phthalic anhydride remained relatively high. The decline in DOP prices was slower than the decline in costs. However, market profitability in the second quarter also showed a fluctuating downward trend. By mid-June, some regions were operating near the cost line, gradually facing sales at a loss.

Table: DOP Data Table for Q2 (Unit: 10,000 tons, yuan/ton)

| Data Type | 2026Q2 | 2026Q1 | 2025Q2 | QoQ Change | YoY Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Production Output | 34.16 | 35.35 | 35.27 | -3.37% | -3.15% |
| Capacity Utilization | 56% | 60% | 62% | -4 ppts | -6 ppts |
| Profit | 138 | 282 | 84 | -51.06% | 64.29% |

The decline in profitability, coupled with weak demand, led to production cuts or shutdowns across multiple units in the second quarter. Notably, Xinluo Ningxing's unit had a prolonged shutdown. Additionally, units such as Weibo, Libang, and Hongbo experienced short-term maintenance shutdowns. Units like Lanfan, Haiyou, Aojia Yongli, and Yimeide implemented varying degrees of production cuts. DOP output in the second quarter is estimated to have fallen to 341,600 tons, down 3.37% quarter-on-quarter and 3.15% year-on-year.

III. Domestic Demand Declined, Exports Increased

Overall downstream end-user demand in the second quarter showed a stepped decline. Driven by the sudden price surge in March, existing orders of end-users provided a temporary demand floor, offering some support for DOP procurement and consumption. Entering April, DOP spot prices remained persistently high. In contrast, PVC raw material prices fell sharply from late March onwards, causing cost inversion for downstream fabricators and hindering the transmission of high raw material costs. New orders shrank significantly from mid-April onward, and demand showed no signs of recovery through June. Combined with the industry gradually entering the traditional off-season, overall end-user consumption continued to contract. Even though some local factories experienced order backlogs, it failed to improve the wait-and-see sentiment in market procurement and could not stimulate active downstream restocking.

Export performance was relatively bright. DOP spot prices continued to offer concessions in the second quarter, highlighting price advantages for foreign sales. This drove a steady increase in overseas orders and loading volumes. Specifically, monthly export volume exceeded 20,000 tons in April. Overall, the total export volume for the industry in the second quarter is expected to reach 55,000 tons or higher.

IV. Weak Demand, DOP Under Pressure

Analysis from Cost and Supply Dimensions: Upstream octanol supply is expected to increase, with downward potential for prices. Ortho-xylene-based phthalic anhydride producers are becoming more willing to offer concessions to move goods. The expected weakening of both raw materials will continue to drag down the comprehensive production cost of DOP, loosening cost support. On the supply side, several DOP production units that were previously shut down for maintenance in late June are gradually restarting. Domestic DOP supply in the third quarter is expected to recover to 353,000 tons, a slight increase compared to the second quarter, simultaneously increasing market supply pressure.

Analysis from the Consumption Dimension: The downstream end-user industry is overall entering the traditional demand off-season. There is no improvement in new order transactions in the market. Domestic demand market support remains persistently weak. However, as spot prices continue to decline, the price advantage for foreign sales becomes more prominent, and export orders provide a strong floor. Short-term total export volume is expected to remain at a high level.

Overall, the current DOP market demand side remains under pressure. The export market is struggling to fully offset the decline in domestic demand, and downstream procurement follow-through is insufficient. At the same time, upstream raw materials have room for price concessions, which will further weaken cost support and drive down product spot prices. The overall domestic DOP market is expected to be weak in the third quarter, with expectations of continued downward movement in the price center.