Asia OX shortage could indirectly support DOP market in near term

SINGAPORE (ICIS)–The shortage of orthoxylene (OX) feedstock will likely continue to indirectly support the Asian dioctyl phthalate (DOP) market in the near term.

Photo: Polyvinyl chloride (PVC) is used in pipes. (Source: Marion Fichter/imageBROKER/Shutterstock)

OX is the feedstock for phthalic anhydride (PA), which is in turn used to produce DOP.

OX bids were higher by $20/tonne in the week to Friday at $740/tonne CFR (cost and freight) NE (northeast) Asia.

The Asian PA market has seen significant price hikes because of the shortages in OX, according to sources.

DOP indicative prices in east Asia import markets were higher in the week so far on Friday.

The buying indication for DOP bulk cargoes was at $950/tonne CFR (cost and freight) east Asia in the week to Friday, some $70/tonne higher compared with the assessed low end on 6 September.

Meanwhile, the other key feedstock for DOP, 2-ethylhexanol (2-EH), should see fairly stable market fundamentals in the immediate future and demand is expected to be supported by some slight increase in DOP run rates at a major producer in northeast Asia.

DOP buyers in China were happy to up their prices but sellers were seemingly not too interested to sell in the week as they could still fetch better prices elsewhere, as high as $1,000/tonne FOB NE Asia according to a producer.

With the price gap between the Chinese import markets and prices elsewhere narrowing, sellers could be tempted to finally sell into China after being away for last 2-3 months, provided DOP prices in the domestic markets continue the uptrend.

Additional reporting by Lim Ai Teng and Samuel Wong

Focus article by Joson Ng