Updated to Q1 2020

Asia

Producers continued to run their units on the low side for dioctyl phthalate (DOP) on poor margins. They were also looking to trade on small parcels. They added dioctyl terephthalate (DOTP) to that list later in Q1 as prices in the Chinese domestic market went on a persistent downward run. Diisononyl phthalate (DINP) supply was generally stable.

Demand for diisononyl phthalate (DINP) was generally stable but fell slightly towards the end of Q1 on weaker sentiment. Some producers said lower-priced dioctyl terephthalate (DOTP) impacted demand for DINP. Demand from China for plasticizers in the import markets was impacted greatly and many producers were forced to look elsewhere or cut rates further.

Europe

Plasticizers supply remained sufficient to cover demand, but there was some reduction in spot availability of DOTP from Russia, Korea and Turkey. There was more than enough DINP, which continued to see some pockets of competition pushing prices a little lower at some accounts. Supply of DPHP was steady at a healthy level.

Demand remained quite consistent in the first couple of months with a steady order flow. Volume offtake in March was healthy, which was initially seen as better seasonal demand, but then appeared to turn into some pre-buying as more consumers got nervous about the implications of a coronavirus outbreak in Europe. By end Q1, there were instances of downstream units reducing rates or shutting down due to the virus taking vital workforce away from sites.

US

Supply of dioctyl phthalate (DOP), dioctyl terephthalate (DOTP) and di-isononyl phthalate (DINP) continued to outpace demand on soft seasonal demand, pushing pricing lower mostly early in the quarter. Weakness in downstream automotive and construction markets is expected to worsen on continued constraints imposed because of the coronavirus. Even before the coronavirus outbreak in the US in late January, downstream demand was expected to be only marginally better in 2020 versus 2019.

Demand for DOP, DOTP and DINP markets was flat to weaker toward the end of the quarter on anticipated slowdowns in US construction and automobile manufacturing during the typically peak-demand period from those markets. A recent survey indicated that some polled paint contractors have cancelled some or all of their planned April and May projects, stemming from shelter-in-place constraints and concerns about potential worker and customer exposure to the coronavirus.

REGIONAL OUTLOOK

Updated to Q2 2020

Asia

Dioctyl phthalate (DOP) producers are likely to continue running at low rates as DOP sellers continue to see no value in selling into China. Dioctyl terephthalate (DOTP) producers have cut run rates at the end of Q1 to balance their books and could opt to stay on that course. Supply for diisononyl phthalate (DINP) should remain relatively stable. Two south Korean producer could start their respective turnarounds in April.

In China, demand for imported plasticizers are not expected to be good as there is a significant price gap to bridge, but not much incentive for both sides to do so.The tail end of Q2 also represents the end of the summer month, which traditionally points to a low demand season.

Europe

Chinese supply is to increase with domestic demand for spring applications largely met. China is to make up bulk of the volumes committed in the 30 March RCF tender. Indian production will likely remain irregular because of the nationwide lockdown, but the government is working on resuming work at plants. The new Ramagundam unit is expected to be delayed beyond its revised May restart date. Chinese supply will offset any production losses in the region.

Traditionally, Q2 should bring about some of the healthiest demand, but the industry is experiencing unprecedented times. There are various examples of customers having to close units, or reduce offtake as commanded by local authorities, or reduce personnel at difference sites. It is unknown how long the virus will continue to impact European run rates, with crisis meetings being held on a daily basis in some cases.

US

Supply of DOP, DOTP and DINP will be steady to longer during Q2 if architectural and automotive coatings demand continues to weaken because of the coronavirus. The pandemic confined many workers to their homes, creating worker shortages and dissipating demand from those downstream markets. Even before the domestic coronavirus outbreak, supply was expected to remain ample in only moderately stronger 2020 downstream markets. Supply will hinge on the duration of the virus.

Demand for US DOP, DOTP and DINP is expected to continue weakening during Q2 on anticipated slowdowns in US construction and automobile manufacturing during the typically peak demand period from those markets. A recent survey indicated that some polled paint contractors have cancelled some or all of their planned April and May projects, stemming from shelter-in-place constraints and concerns about potential worker and customer exposure to the coronavirus.

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