East Asia 2-EH faces weak demand on negative plasticizers margin

Author: Joson Ng

2019/07/11

SINGAPORE (ICIS)--While high propylene prices have helped to bolster spot 2-ethylhexanol (2-EH) market in east Asia, demand for 2-EH was lacking in the wake of negative margin in downstream plasticizers.

(Source: Photo by Imagine China/REX/Shutterstock)

Spot 2-EH prices in east Asia were higher marginally so far on Thursday.

Buy indications were at around $930-940/tonne CFR (cost and freight) east Asia, up by $10-20/tonne compared with the assessed low end on 5 July.

Spot prices were higher in China as producers tried to fend off cost pressure caused by recent high propylene prices, which had increased from $897.5/tonne CFR NE (northeast) Asia on average on 28 June to $922.5/tonne CFR NE Asia on 5 July, ICIS data showed.

Higher propylene prices had resulted due to plant outages and tightened supply in China.

Meanwhile, some buyers conceded that 2-EH prices should be slightly higher in the week, while other buyers were generally not in urgent need for spot cargoes.

One Chinese buyer said its contract supplier had proposed to supply more contract lots in the coming month so it had no spot demand.

2-EH is generally used to make plasticizers like dioctyl terephthalate (DOTP) and dioctyl phthalate (DOP).

The same buyer said it was difficult to absorb higher priced 2-EH since it was no longer profitable to make DOTP in China. DOTP margin had slid into the negative territory last month.

One plasticizers producer said it has lowered its run rates for its DOP unit amid negative margin.

This producer said it would be looking to buy from its domestic market as one 2-EH domestic supplier - who also makes DOP - has reduced the run rates at its DOP unit.

ICIS Editorial Chart goes here

Focus article by Joson Ng