Introduction: In the first quarter, the DOTP market price bottomed out and rebounded, reaching a near two-year high. Influenced by the Middle East situation, DOTP prices experienced a strong rebound, moving away from the impact of supply-demand fundamentals. As of now, the quarterly average market price for DOTP is referenced at 8,664 RMB/ton, an increase of 1,574 RMB/ton or 22% compared to the fourth quarter. Profits turned from loss to gain, rising by 349 RMB/ton year-on-year.

Table 1: Overview of Key Domestic DOTP Market Indicators for Q1 2026 (RMB/ton, 10k tons)

| Indicator | Q1 2026 | Q4 2025 | Change (Value) | Change (%) |
| :--- | :--- | :--- | :--- | :--- |
| Avg. Price (Zhejiang) | 8,664 | 7,090 | +1,574 | +22% |
| Gross Profit (Zhejiang) | 332 | -17 | +349 | +2053% |
| Output | 48.6 | 54.6 | -6 | -11% |

Data source: chempricehub

I. DOTP Prices Bottom Out and Rebound, Reaching Near Two-Year High

The DOTP market in the first quarter exhibited characteristics of intense volatility driven by multiple intertwined factors, with prices following an "N-shaped" trajectory. The core driving logic shifted among supply-demand dynamics, cost support, and geopolitical factors. According to chempricehub statistics, taking the Zhejiang region as an example, the average Q1 2026 DOTP market price was 8,664 RMB/ton, an increase of 1,574 RMB/ton or 22% compared to Q4 2025. The quarterly low occurred around February 28th at 7,700 RMB/ton ex-warehouse, while the high occurred around March 24th at 10,700 RMB/ton ex-warehouse, resulting in a price spread of 3,000 RMB/ton. The average price for March surged by 22.97% month-on-month, with volatility significantly exceeding conventional levels.

Demand during the quarter showed phased divergence, with pre-holiday "buying on rallies" sentiment contrasting sharply with post-holiday contraction in rigid demand. In the first month, orders for end-use products were favorable, and restocking willingness from end-users and traders boosted transaction activity. Supported by multiple positive factors including recovering demand, pre-holiday stocking, and tight spot supply, market prices rose strongly. In February, around the Spring Festival holiday, as downstream restocking concluded and factories began holiday closures, rigid demand contracted noticeably. Simultaneously, cost support weakened, causing prices to retreat from highs to around 7,700 RMB/ton. The market entered a cautious atmosphere of "buying on rallies, not on dips."

Cost factors and geopolitics became key variables. Prices of core raw materials, octanol and PTA, interacted with DOTP prices. Tensions in the Middle East geopolitical situation triggered a surge in international crude oil prices, boosting sentiment in the chemical products market and driving a phase of significant price increases for DOTP, pushing prices to near two-year highs. Fluctuations in the geopolitical situation and crude oil volatility caused the market to detach from supply-demand fundamentals, exhibiting wide-ranging fluctuations.

Overall, the DOTP market this quarter was influenced by the resonance of multiple factors. The market performance was characterized by a pattern of "cost providing a floor, demand lacking elasticity, and news-driven volatility." Industry operating rhythms accelerated, with intense competition persisting throughout.

II. DOTP Supply Increases Year-on-Year

Domestic DOTP output in Q1 2026 was 486,000 tons, showing a trend of "sequential decline but steady year-on-year growth." Compared to Q4 2025, output decreased by 60,000 tons, a sequential decline of 11%. However, compared to the same period in 2025 (Q1), output increased by 19,000 tons, a year-on-year rise of 4%. The growth is even more significant compared to Q1 2024, with output increasing by 75,000 tons, a substantial year-on-year increase of 18%.

The sequential decline in output this quarter represents a reasonable fluctuation, primarily due to the Spring Festival holiday falling within the quarter, significantly impacting industry operating rhythms. During the Spring Festival, most DOTP producers followed industry practice by shutting down for the holiday. The interruption in plant operations led to a phased contraction in output. This seasonal factor directly lowered the overall output scale for the quarter, consistent with output change patterns in previous quarters containing the Spring Festival.

Despite the holiday disruption, overall plant operating rates remained at medium-to-high levels this quarter, providing strong support for output growth. In January, before the holiday, demand in the end-use products market was active, and spot supply was tight. Favorable market conditions prompted DOTP producers to maintain high operating rates to ensure market supply. After the holiday, driven by ample profit margins, producers were highly motivated to resume operations, quickly restoring production rhythms and effectively compensating for the output gap during the holiday period.

Overall, apart from short-term adjustments around the Spring Festival holiday, DOTP producers maintained stable operations for most of the quarter with high production enthusiasm. This not only met phased market demand but also drove significant year-on-year output growth, demonstrating the industry's good development resilience.

III. High Profitability for DOTP Producers

In Q1 2026, the domestic DOTP industry's profitability performance was strong, with the sector mostly in profit throughout the period, achieving significant repair and improvement in profit margins. Taking the Zhejiang market as an example, the average theoretical profit for DOTP this quarter reached 332 RMB/ton. This represents a successful turnaround from the loss-making state in Q4 2025, with a sequential increase of 349 RMB/ton. Compared to the profit of 166 RMB/ton in the same period of 2025 (Q1), it more than doubled, marking a new level for industry profitability.

Profitability for DOTP producers this quarter showed phased differentiation, with monthly profit rhythms dynamically adjusting to market factors. In January, supported by recovering end-user demand, the DOTP market transaction atmosphere improved, and prices rose steadily. Producer profit margins gradually recovered, laying a good foundation for quarterly profits. In February, the core raw material octanol market faced oversupply, with persistent inventory accumulation pressure accelerating price declines. The easing of cost pressure shifted profit focus within the industrial chain towards the downstream plasticizer segment, allowing DOTP producers to maintain profit margins. In March, DOTP producer profits experienced explosive growth: driven by Middle East geopolitical events, international crude oil prices fluctuated sharply, causing raw material prices to oscillate accordingly. Market sentiment rapidly pushed up DOTP prices, driving producer profits to surge and break through near two-year peaks. The full release of profit elasticity further confirmed the core pattern of profit focus shifting downstream in the industrial chain.

On one hand, the continuous release of octanol industry capacity kept market supply loose, providing ample cost space for downstream DOTP producers. On the other hand, market sentiment amplified by geopolitical events in early 2026 increased the price elasticity of downstream products, causing DOTP price increases to outpace raw material cost increases. This further solidified the profit advantage for downstream producers, driving a leap in industry profitability.

IV. Market Outlook

The core drivers for the domestic DOTP market from April to June 2026 are expected to be the dynamic changes in cost support and the seasonal shift in supply-demand fundamentals.

In the short term, the Middle East geopolitical situation remains unclear, with potential conflict risks continuing to support international oil prices. Coupled with octanol prices staying high supported by contract orders and export demand, and PTA prices supported by expectations of reduced supply, cost-side support remains relatively strong. Simultaneously, downstream industries like PVC soft products still have rigid procurement needs, with some companies having restocking demand. Furthermore, DOTP producers, considering remaining market uncertainty risks, are cautious about offering discounts. Therefore, short-term DOTP prices are expected to maintain high-level consolidation with limited fluctuation amplitude. However, it is important to note that small and medium-sized end-product manufacturers have already shown signs of reducing operating rates, indicating a lack of elasticity in demand support.

Moving into the medium term, if the Middle East situation gradually eases, expectations of tight global crude oil supply and demand are likely to improve, and geopolitical risk premiums gradually fade. A decline in crude oil and upstream raw material prices would lead to a continuous weakening of cost-side support. Pressures from ample octanol supply and negative factors from PTA, such as the retreat of crude oil premiums and sufficient spot supply, would materialize. DOTP prices may consequently face downward pressure. At the same time, downstream industries will fully enter the traditional off-season. Demand in major consumption areas like gloves and films will continue to weaken, and buying procurement intensity will decline. With DOTP producers maintaining medium-to-high operating rates, ensuring ample supply, market oversupply pressure will increase. Combined with the "buy on rallies, not on dips" mentality, market participants' wait-and-see sentiment may intensify, and downward price pressure will continue to accumulate.

In the longer term, by June, as the off-season effect deepens further, the combined impact of weakening cost support and loose supply-demand dynamics will lead to a more pronounced correction in DOTP prices. The overall downward trend is likely to become clearer.