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Updated to Q2 2021
Supply continued to be tight in Q2, as two major regional suppliers in Taiwan – UPC Technology Corp and Nan Ya Plastics – remained offline after shutting down their respective plants unexpectedly in Q1. At the same time, DOTP, DOP and DINP suppliers continued to see their production hampered by high feedstock costs and a shortage in feedstock.
Demand was lower in Q2, amid waning downstream margins and high feedstock costs. Most buyers purchased on a need-to basis, as volatility in Chinese domestic prices dampened import sentiment. Demand for DOTP dipped due to increased competition in the PVC gloves market. Meanwhile, demand for DINP remained stable on the back of a global shortage.
In early Q2, spot supply of all grades rapidly tightened due to tense feedstock supply, force majeures and strong demand. DOTP was the tightest grade and many players could not secure sufficient spot material. Material availability reached peak tightness in April for DINP and DOTP. Supply constraints began to ease as high prices dampened buying interest, allowing some producers to build healthier inventories. DPHP supply was stable and slightly constrained.
At the outset of Q2 demand was strong for all grades as some industries performed better than expected and constrained supply resulted in competition among buyers. Buying interest in DOTP, in particular, was extremely strong. In late Q2, demand for all grades was dampened by extremely high prices, which were unsustainable for some small buyers. DOTP demand fell sharply as healthy imports from east Asia and Turkey entered the market.
Supply of DOP, DOTP and DINP during Q2 remained consistently tight on continued import delays, ongoing tight supply of upstream 2-EH and PA and strong buying interest. Buyers said domestic producers do not have sufficient supply to meet customer demand, and order controls are expected to remain in play at least for the near term. Import delays persisted, especially from primary importer Asia.
Demand for DOP, DOTP and DINP picked up as interest continued strong from the automotive and construction sectors, although both are constrained – automotive by component shortages, and construction by high costs and supply-chain issues. The downstream automotive manufacturing segment also announced some production cutbacks due to the global shortage of microprocessors, which will likely soften plasticizers demand from that sector and potentially ease supply strain.
Updated to Q3 2021
Supply of plasticizers is expected to increase in Q3, with major regional suppliers UPC Technology Corp and Nan Ya Plastics expected to restart their respective plants around the start of the quarter. Producers in Asia are also likely to start to increase their run rates on the back of improved feedstock availability and lower feedstock costs.
Demand for DOTP, DOP and DINP is expected to remain lacklustre in Q3, on the back of increased uncertainty in the Chinese markets. Demand for medical end- uses is likely to fall further as the pandemic comes under control in China, while the resurgence of the pandemic in other parts of Asia could slow plasticizers export growth.
It is expected that built up material shortages will result in more liquidity and higher run rates than is typical for Q3. A small lull in activity is expected as some end-use plants close over the holiday period. Several maintenances are planned in Q3; but players are confident that they will not result in severe tightness. Healthy imports from Turkey are expected to continue throughout the quarter.
Robust demand is expected to continue through Q3. Built up material shortages from Q2 are anticipated to buoy demand over the summer, resulting in a more liquid holiday period. DOTP demand will intensify when shortages of other raw materials required by some buyers, such as PVC, subside. Buying interest in DOTP will be calmer due to greater competition between sellers.
Supply of DOP, DOTP and DINP during Q3 is expected to remain largely constrained, with imports from Asia expected to continue seeing lengthy delays amid shortages of containers and vessels, and with US allocations likely to persist at least for the near term. A downstream manufacturer of construction-related products expects further supply constraints as its volume needs increase seasonally. Shortages of upstream 2-EH and PA will persist.
DOP, DOTP and DINP demand will continue to gain momentum in Q3, with some producers of downstream products for homes and businesses anticipating more supply strain than experienced in Q2. Although demand from construction and automobile manufacturing have been constrained by supply-chain issues in those segments, some pent-up demand is anticipated seasonally, and if those issues are somewhat resolved in the coming quarter.
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Plasticizers are chemical compounds or additives that are added to polymer material to alter the physical properties to achieve certain characteristics such as flexibility and durability. These are applied in various types of products in every industry from synthetic fabrics to plastics packaging and automotive. Plasticizers are categorized into different families falling under phthalates or non-phthalates.
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