Introduction
In the first half of 2023, the DOTP market experienced fluctuations, and in May, prices fluctuated significantly due to unexpected factors. It is expected that the DOTP market will rise first and then fall in the second half of the year. The negotiated price operation range in East China may be 8750-9800 yuan/ton, and the average price will fall compared with the first half of the year. According to the seasonal law, the high point in the second half of the year may appear in September and October, and the low point may appear in December.
The domestic DOTP market fluctuated in the first half of the year, with an average price decline year-on-year. The trend is roughly the same as what we predicted in the "2022-2023 China DOTP Market Annual Report". In May, due to unexpected factors, the octanol market rose beyond expectations, resulting in a certain deviation between the performance of the DOTP market in May and expectations. The other time periods were basically consistent. From January to June 2023, the domestic DOTP market range will fluctuate, and the average price will fall significantly year on year. The lowest value in East China is 9125 yuan/ton in the first ten days of June, and the highest value is 10750 yuan/ton in the first ten days of May. The price difference between the high and low end is 1625 yuan/ton, and the average price is 9886 yuan/ton, down 2002 yuan/ton, or 16.84%, compared with the same period last year.
Cost, demand, and other factors are the main factors that affect the trend of the DOTP market in the first half of the year, especially octanol. From Figure 3, it can be seen that the DOTP market trend is positively correlated with the octanol market. The main driving factors of the octanol market in the first half of the year revolve around weak demand side and strong supply side fluctuations, with overall low volatility being the main factor, and DOTP costs fluctuate accordingly. The market volatility was relatively high in May, and in the first ten days, due to factors such as supply, the octanol market saw a significant increase, with increased DOTP cost support and an increase in market prices; However, the transmission of industrial chain costs is hindered, and the prices of octanol in the mid to late October market have fallen. DOTP cost support is insufficient, and the market has fallen from high levels.
In the first half of 2023, the DOTP industry is still in a state of overcapacity, with low device utilization. From January to June 2023, the total output of the domestic DOTP industry was 673600 tons, a decrease of 22200 tons or 3.18% compared to the same period last year. The average operating load rate of the industry was 40.67%, a decrease of 1.69 percentage points compared to the same period last year. The main reasons for the year-on-year decline in the average operating load of the DOTP industry are the lower than expected performance on the demand side and the continued low profitability of the industry.
On the demand side: Taking PVC gloves as an example, from January to May 2023, the export volume of PVC gloves decreased year-on-year, with 140600 tons, a decrease of 40100 tons or 22.53% compared to the same period last year. The high point was 33000 tons in March, and the low point was 25800 tons in January. The export orders for PVC gloves have decreased year-on-year, and the operating load of domestic PVC glove factories remains low, resulting in weak procurement efforts for DOTP. In addition, other downstream export orders such as PVC Artificial leather also performed poorly, and the overall performance of DOTP demand side was less than expected.
In addition, from January to June 2023, the DOTP industry's Gross profit will fluctuate at a low level. Taking East China as an example, the highest Gross profit will be 411 yuan/ton in the first ten days of May, and the lowest will be -18 yuan/ton in the last ten days of March, with an average of 206 yuan/ton, down 13 yuan/ton or 5.77% compared with the same period last year. The DOTP industry is still in a state of severe overcapacity, with pressure on the supply side. The overall profitability of production enterprises is weak, with more on-demand production and low device utilization.
Looking ahead to the second half of the year, cost changes and demand side performance are important factors affecting the DOTP market trend, especially the performance of the upstream raw material octanol market, which has received high attention.
In terms of octanol: From the supply side, it is expected that the Baichuan unit in Ningxia will reach production capacity in the second half of the year, while the Jianlan unit in Shandong has recovery plans. The new production capacity may gradually release its incremental capacity in the second half of 2023, and the supply level is expected to continue to improve. With the expected decrease in octanol prices compared to the first half of the year, industry profits may continue to decline in the future, but the upstream propylene cost side is at a low level, and it is expected that the industry's profit space will fluctuate limited. From the demand side, it is expected that with the improvement of macroeconomic recovery, consumption in related industries is expected to rebound, and there is also an expectation of a rebound in terminal product exports. The supply and demand fundamentals of octanol are expected to recover in the third quarter. The slowdown in the Federal Reserve's rate hike process in the second half of the year and the correction of excessive expectations of recession have led to a transition period from passive destocking to restocking of commodities. In the second half of 2023, octanol is expected to continue to show a volatile trend. With the expectation of a possible increase in supply after the fourth quarter, the market will present a volatile downward adjustment situation, with a high point appearing in the third quarter and a low point appearing in the fourth quarter. It is expected that the operating range of the Jiangsu octanol market is between 8000 to 9800 yuan/ton. The cost of DOTP fluctuates with octanol.
Demand: In the second half of August, with the arrival of the traditional peak season of "golden nine and silver ten", the starting load of downstream PVC wires and cables and other enterprises is likely to increase. The purchase of raw materials may increase, and the demand for DOTP market may recover. However, due to the uncertainty of the international macro environment and other factors, the export orders of PVC Artificial leather and other products enterprises may be difficult to improve significantly, and the market mentality of caution may continue to accompany; From November to December, downstream industries are in the traditional production off-season, and the average operating load of the industry may drop to around 40%, leading to a contraction in the DOTP market demand.
Based on the above analysis, the trend forecast for the second half of the year in 2022-2023 Annual Report on China's DOTP Market is continued. It is expected that the DOTP market will rise first and then fall in the second half of the year. The operating range of the negotiated price in East China may be 8750-9800 yuan/ton, and the average price will fall compared with the first half of the year. According to the seasonal law, the high point probably occurs in September and October, and the low point may occur in December.
we supply Plasticizer Dioctyl Terephthalate (DOTP) , plasticizer Dioctyl Phthalate (DOP) , plasticizer Dibutyl phthalate (DBP) , plasticizer Dioctyl Adipate (DOA)
