OUTLOOK ’17: China plasticizers likely stable-to-soft in Q1

Source: ICIS News

2016/12/28

By Joson Ng

SINGAPORE (ICIS)--China’s plasticizers market is expected to be stable-to-soft in the first quarter of 2017 following a general uptrend toward the end of 2016, with prices of both dioctyl terephthalate (DOTP) and di-isononyl phthalate (DINP) hitting their highest for the year in November, market sources said.

“DOTP prices were losing steam,” said a northeast Asian producer.

The same fate is expected for DINP as spot prices of feedstock phthalic anhydride (PA) lost their upward momentum. DINP tends to track DOP prices closely in the Chinese import spot market, according to market sources.

An early Lunar New Year, however, may be a silver lining for most suppliers since it could trigger some downstream buying activities, industry sources said.

“Restocking activities may start as early as December since the Lunar New Year is earlier in 2017,” said one northeast Asian producer.

The Lunar New Year falls on 28 January 2017.

“Plasticizers prices will increase in the first quarter,” said a separate northeast Asian producer.

More stringent environmental checks in China may affect utilization rates at some domestic plants, creating a potential vacuum that producers outside of China may be able to fill.

China’s DINP import prices gained 30.3% in the first 11 months of 2016, to average around $990/tonne CFR (cost and freight) China in end-November, according to ICIS data.

In the FOB (free on board) NE (northeast) Asia market, DINP gained some 20.5% over the same period to about $1,000/tonne FOB NE Asia.

Some 95% of DINP is used in polyvinyl chloride (PVC) applications. More than half of the DINP used in non-PVC applications involves polymer related-uses.

DOTP gained some 17.8% in January to November 2016 in the Chinese import market to about $1,025/tonne CFR China.

DOTP is employed in food contact products, medical goods and toys.

The dioctyl phthalate (DOP) spot market saw healthy gains in the month of November as a strong feedstock phthalic anhydride (PA), coupled with tightness of supply for DOP, acted as drivers to push prices up by some 6.3%.

Like the rest of oxo alcohols, DOP prices are expected to be slightly weaker at the start of the year. The market is likely to track the Chinese domestic and feedstock PA markets for much of the year.

Asia plasticizers 22 December