The price of plasticizer DOP fell sharply in June

According to the commodity market analysis system of SunSirs, the price of DOP stood at 8,367.50 RMB/ton as of June 29, marking a decline of 8.48% from the 9,142.50 RMB/ton recorded on June 1. Influenced by geopolitical tensions between the US and Iran, the price of isooctanol initially rose slightly before falling; consequently, DOP prices in June followed a pattern of surging early in the month followed by a sustained, sharp, and unidirectional decline.

Cost side: Support from raw materials had completely collapsed across the board

The primary raw materials for DOP are isooctanol (the main component) and phthalic anhydride (an auxiliary component); in June, both raw materials weakened simultaneously, causing DOP to completely lose the cost support that had previously underpinned its price.

The price of the raw material isooctanol saw a slight rise followed by a sharp drop

According to the commodity market analysis system of SunSirs, the quoted price of isooctanol stood at 7,400 RMB/ton as of June 29. This reflects a trend of initial rise followed by a decline from the June 1 price of 7,966.67 RMB/ton, resulting in a net drop of 7.11%. Factors contributing to this include the dissipation of the geopolitical premium on crude oil and the release of new domestic production capacity, leading to oversupply; coupled with weak demand, there is mounting downward pressure on the prices of both isooctanol and DOP.

The market for phthalic anhydride was trending downward due to weakness

According to the commodity market analysis system of SunSirs, the quoted price for ortho-xylene-based phthalic anhydride (PA) stood at 8,200 RMB/ton as of June 29, marking a decline of 5.57% from the 8,683.33 RMB/ton recorded on June 1. The market was driven downward by two major bearish factors: a sharp drop in crude oil prices following the US-Iran agreement—which cascaded into lower costs for ortho-xylene (the feedstock for PA)—and a collapse in demand for downstream plasticizers during the off-season. Consequently, prices for both ortho-xylene-based and naphthalene-based PA fell, resulting in a fluctuating downward trend for the domestic PA market throughout June. The decline in PA prices eliminated the cost support previously provided to DOP.

Analysis of DOP Market Supply and Demand in June

Supply Side: Overall Oversupply

In June, the capacity utilization rate of the DOP industry stood at 52%; operating rates at major plants remained largely stable, rising to around 60% by the end of the month. However, procurement demand was excessively weak, leading to an increase in market supply and a gradual accumulation of inventory.

Demand Side: PVC Off-Season; DOP Demand Remained Sluggish

Sluggish demand is the primary factor constraining upward price momentum. June marks the traditional off-season for downstream PVC products (such as artificial leather, cable compounds, films, and flooring), resulting in a decline in end-market orders. Downstream factories are maintaining a "purchase-as-needed" strategy, refusing to stock up in advance, and there is virtually no large-scale bulk procurement. Demand for plasticizers remains weak.

Market Overview and Outlook

Analysts at the SunSirs plasticizer division identify three converging bearish factors driving DOP prices down: on the cost side, the easing of US-Iran tensions has led to a drop in crude oil prices, subsequently pulling down the costs of raw materials such as isooctanol and phthalic anhydride; on the supply side, operating rates at plasticizer plants have rebounded, increasing market availability and leading to a gradual accumulation of inventory; and on the demand side, the market is in its off-season, making substantial improvement in downstream demand unlikely. With weakening raw material costs, increased supply, and the off-season slump all exerting downward pressure, DOP prices are expected to continue their weak trend and drift lower amidst market fluctuations.

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