Opening: Recently, the domestic DBP market price has stabilized after a decline, with operating rates dropping to low levels, providing some support for prices. However, the downstream sector is in a slack season, maintaining only hand-to-mouth operations for DBP demand.

1. DBP Market Prices Stabilize After Decline

Entering June, the domestic DBP market remained in a state of weak range-bound fluctuation. Early in the period, sharp declines in raw material prices reduced costs, weakening cost-side support for DBP prices. Additionally, as the downstream sector entered the off-season, demand for DBP remained low, with downstream players maintaining cautious, just-in-time purchasing at lower levels. Consequently, market inquiry and transaction sentiment were poor, leading to an increase in producer inventory levels. With inventories continuously rising, sales pressure intensified. Following consecutive price declines, DBP profit margins fell to freezing point. In response, production units increasingly halted or reduced operations, significantly cutting market supply. Producers focused on destocking, which slightly alleviated supply pressure. Recently, due to market supply tightness for phthalic anhydride, its prices have risen consecutively, causing low prices to disappear from the DBP market and prices to stabilize.

Table 1: Domestic DBP Industry Chain Price Summary (Unit: RMB/ton)

| Product | Market | 2026/6/1 | 2026/6/12 | Change Value | Change % |
| --- | --- | --- | --- | --- | --- |
| DBP | Shandong | 8550 | 8550 | 0 | 0% |
| | Henan | 8300 | 8300 | 0 | 0% |
| | North China | 8450 | 8400 | -50 | -0.59% |
| | South China | 8700 | 8700 | 0 | 0% |
| Key Upstream | | | | | |
| n-Butanol | Shandong | 6725 | 6800 | 75 | 1.12% |
| Naphthalene-based PA | Hebei | 7900 | 7700 | -200 | -2.53% |

Source: chempricehub Information

2. Raw Materials Bottom Out and Rebound; Cost Side Supports DBP Price Stabilization

Of the two main raw materials for DBP, n-Butanol's market recently stabilized after a decline. Initially, overall market trading sentiment was not optimistic due to sluggish downstream demand. However, later, as downstream operating rates slowly recovered, market demand gradually increased. Combined with limited earlier procurement by downstream buyers and subsequent concentrated short-term purchasing, coupled with some n-butanol producers executing export orders, rising market consumption supported prices, leading to stabilization.

The other raw material, phthalic anhydride (PA), also bottomed out and rebounded. Affected by price reductions in its dual raw materials, cost-side support weakened. Together with persistently weak demand, market resistance to PA remained strong, putting pressure on the market. Under the dominant weak demand, ortho-xylene-based PA market prices experienced a gradual decline. However, with the rapid price drop of naphthalene-based PA, the price gap between ortho- and naphthalene-based PA widened again. Additionally, downstream raw material inventories were low. Driven by downstream restocking for essential needs, the inventory overhang in the domestic naphthalene-based PA industry continued to be sold forward, with spot supply tightening in some regions. Consequently, the naphthalene-based PA market bottomed out and rebounded.

Both major raw materials had experienced significant earlier declines, gradually weakening their cost support for DBP. With these raw material prices stabilizing and rebounding, cost-side support has strengthened. DBP costs fell due to the substantial raw material price drops, but DBP prices remained relatively stable, resulting in a modest increase in profit margins.

Table 2: DBP Cost-Profit Comparison (Unit: RMB/ton)

| Item | 2026/6/1 | 2026/6/12 | Change Value | Change % |
| --- | --- | --- | --- | --- |
| Shandong Region Cost | 8440 | 8374 | -66 | -0.78% |
| Shandong Region Profit | 110 | 176 | 66 | 60.00% |

3. Weak Demand and Low Profitability Drive DBP Operating Rates to Low Levels

In late May and early June, domestic DBP market prices plummeted, pushing DBP profits into a loss stage. Concurrently, the end-user downstream sector entered the off-season, leading to a significant decline in demand. Overall market inquiry and transaction volumes were poor. Producers faced inventory build-up due to hindered sales, continuously increasing sales pressure. As inventories rose to high levels, an increasing number of units halted or reduced output. As of June 12, domestic DBP daily output fell to about 1,229 tons, with the daily operating rate at approximately 45.31%. Compared with May 31, daily output decreased by about 248 tons, and the operating rate dropped by 9.15 percentage points.

4. Future Outlook

Cost Side: Regarding the raw material n-butanol, due to future demand growth and prolonged loss situations, market supply is expected to remain low, with prices likely to fluctuate in a range. For domestic phthalic anhydride, there is a slight expectation of an uptick, mainly due to tight supply in the spot market and concentrated restocking procurement, which may exacerbate the oversupply situation.

Supply and Demand: On the demand side, the end-user market is performing generally mediocre. Still in the off-season, demand is expected to remain primarily just-in-time, providing insufficient overall support.

Overall Assessment: With increased support from raw materials and lackluster downstream demand, DBP operating rates are expected to remain at low levels. Producers will focus on stabilizing low prices to actively sell and reduce inventories. The domestic DBP market is anticipated to trade in a stable but possibly fluctuating range.