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Updated to Q3 2020
Supply was largely stable at the start of Q3 as DOTP, DOP and DINP producers kept operating rates close to full on the back of continued demand. However, some producers in China adjusted their run rates lower as prices dipped on ample supply.
Demand was stable in Q3, following a rally in the previous quarter. Demand for DOTP, which saw increased use in the production of medical gloves, remained strong due to the coronavirus pandemic. DOP and DINP saw continued demand, but to a lesser degreee.
There were a number of planned turnarounds during Q3 which curtailed inventories at several European manufacturers. There were also a few unplanned issues following a restriction on the supply of feedstocks into plasticizers units. In addition, imports were reduced for DINP and DOTP from South Korea and there was less spot material noted from Russia and the US for DOTP.
July demand was quite reasonable for plasticizers. It was not at pre-pandemic levels, but heading in the right direction with an improvement seen in the flooring and construction-related sectors. August was mixed with some areas, particularly the south, experiencing the usual summer slowdown. However, demand rebounded into September and it proved to be a relatively strong month in terms of orders across a variety of sectors and regions.
Q3 supply of DOP and DOTP was steady. However, the availability of DINP continued to be constrained later in the period amid delayed and inadequate imports from Asia and Europe, which decreased availability even as buying interest picked up. Despite a persistent pandemic, demand improved from the automobile-manufacturing sector but at a slower pace than construction applications.
DOP, DOTP and DINP volumes increased as demand picked up from the downstream construction and automobile-manufacturing sectors. During Q3, social-distancing constraints continued as some paint-contractor projects resumed, but resurgent coronavirus cases still limited growth. Although demand from residential construction picked up, commercial projects languished, creating an uneven recovery. The automotive sector’s recovery will be gradual.
Updated to Q4 2020
Supply is expected to be lower in Q4 as some producers conduct scheduled turnarounds. However, operating rates are expected to remain on the high side due to firm demand. DINP supply is expected to fall because of tighter feedstock INA supply.
Demand is expected to increase slightly in Q4. Demand for DOP and DINP is expected to improve gradually, in tandem with economic activity across parts of Asia following lockdowns. Demand for DOTP is expected to remain unchanged with the ongoing pandemic.
Availability is expected to be better balanced as Q4 progresses. Various production issues in Europe, both planned and unplanned, have mostly been resolved, but inventories have yet to be fully replenished in some instances and there is still a lack of imports from South Korea, in particular. Although the arbitrage has played a part in this, there was also talk of limited vessel space and higher freight rates.
October started with good demand for DINP, DOTP and DPHP. Some said there was little difference in volumes for October 2020 versus 2019, although it was noted that the end of 2019 saw flattish demand for plasticizers. The main question mark hovers over November demand and if the traditional year-end slowdown seen in December will start sooner, or if the healthy consumption seen in October continues.
Q4 supply of DOP, DOTP and DINP is expected to remain mixed. DINP supply may remain somewhat strained amid shipping delays mostly out of Asia, although pricing may modulate downward as seasonal domestic demand weakens. DOP and DOTP supply will likely remain stable, even with some pent-up demand stemming from diminished demand last spring when lockdowns were in effect. Some year-end destocking will further trim supply.
Q4 demand for DOP, DOTP and DINP may benefit in October from continued pent-up demand and buying momentum that increased in Q3, but typical seasonal demand weakness is likely to emerge by early November. The Christmas and US Thanksgiving holidays will likely reduce business activity. Year-end destocking and broad economic uncertainty will keep year-on-year demand volumes either below or flat with 2019 levels.
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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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