As of November 6th, the DOP price was 11250.83 yuan/ton, which first increased and then decreased by 0.60% compared to the DOP price of 11183.33 yuan/ton on November 1st; Compared to November 2nd, the DOP price fluctuated and fell by 1.24% to 11391.67 yuan/ton. Supported by high raw material costs, DOP prices briefly hit a new high for the year at the end of October, and continued to rise on November 2nd. Subsequently, under the dual pressure of cost loosening and weak demand, the DOP market rapidly weakened, and industry profits were compressed to an extremely low level close to breakeven. The market showed a typical pattern of “volume increase and profit decrease”, and the probability of DOP prices operating under weak pressure was relatively high.
This week, the price of isooctanol fell from a high level
As of November 6th, the price of isooctanol was 10166.67 yuan/ton, a decrease of 3.17% from the high of 10500 yuan/ton on November 1st. Entering November, crude oil and propylene experienced a pullback, downstream PVC and plasticizer companies resisted high prices, and the center of gravity of octanol fell. The quotes of core manufacturers of isooctanol have continued to decline since November 3rd, and the isooctanol market has experienced a high-level pullback and volatile bearish trend. The support for raw material costs has weakened, and DOP has lost its upward momentum.
This week, the price of phthalic anhydride fluctuated and fell
As of November 6th, the price of phthalic anhydride from neighboring countries was 10516.67 yuan/ton, a fluctuating decrease of 2.02% compared to the price of phthalic anhydride on November 1st, which was 10733.33 yuan/ton. Affected by the significant decline in ortho xylene and crude oil, phthalic anhydride is under high pressure, and downstream shipments are cautious, resulting in a weak fluctuation of phthalic anhydride. Dragging down DOP costs and weakening DOP cost support.
Profit is squeezed and forced to reduce production
Taking the Shandong market as an example, when it returned to the market after the National Day holiday, the DOP profit was still 300-400 yuan/ton. In late October, it dropped to around 100 yuan/ton, and in early November, it had shrunk to only 7 yuan/ton. The extremely thin profit margin is also forcing the supply side to consider reducing production. At the end of October, the utilization rate of DOP production capacity had recovered to 62%, and in early November it dropped to the weekly average level of 57% -58%. DOP prices hit a high level, and downstream refused to follow up. The supply increment quickly transformed into price pressure, forcing DOP to reduce production and prices.
Market Overview and Future Expectations
Analysts believe that a loose chain of crude oil propylene octanol/phthalic anhydride on the cost side is forming. The cost of DOP raw materials is decreasing, and profits are being squeezed. The DOP market is weakly oscillating at high levels, and there is a risk of a slow downward shift in focus. However, the support of the cost floor price and the expectation of production reduction jointly constrain the extent of the decline. Although the prices of isooctanol and phthalic anhydride have fallen from high levels, they are still at high levels. The room for DOP concessions is “locked” by profits, and the room for DOP concessions is limited. Overall, the DOP market is under pressure and there is limited room for a narrow pullback, but there is limited room for a deep decline.