Asian plasticizers market eyes brighter September as import talks stall

Author: Jude Chan

2020/08/31

SINGAPORE (ICIS)--Import discussions have slowed to a trickle in the Asian plasticizers market amid a wide buy-sell gap.

  • Talks to ramp up in September
  • Import prices have stagnated amid buy-sell gap
  • Demand for DOTP remains the bright spot

Sellers have been hanging on to higher offers to protect their margins as feedstock prices remain high, while buyers are hesitant to commit amid falling prices in China’s domestic market.

But market players remain optimistic that sentiment for plasticizers in general could be revived in September, as talks ramp up ahead of the traditional seasonal peak at the start of Q4.

Demand is also expected to see an uptick before the long holiday in China at the start of October, one seller said.

“There’s optimism for discussions and demand to increase as we move into September,” a separate producer said.

“When prices fall, no one buys because everyone thinks the prices will fall further. But when prices start to rise, everyone will rush to buy.”

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Over the past quarter, demand for most plasticizers, including diisononyl phthalate (DINP) and dioctyl phthalate (DOP), has been muted in general amid a protracted recovery from the coronavirus pandemic.

The exception has been dioctyl terephthalate (DOTP), which had seen a surge in demand since Q2 due to its popularity for use in the medical sector in the production of medical gloves.

Mid-point prices for DOTP climbed from a trough of $765/tonne CFR (cost & freight) China in April to $960/tonne by July.

From July to August, mid-point prices for DOTP have plateaued, and are fluctuating at around $945-960/tonne.

In the same period, however, DOTP prices in east China have seen a steady decline, with demand growth slowing as most players had already jumped on the bandwagon.

While demand remains relatively stable, sentiment for DOTP has waned in China amid the increase in competition.

Meanwhile, supply of DOTP has increased in China, with some producers switching units to produce DOTP instead due to the stronger demand compared with the other plasticizers.

As a result, some buyers are turning to the domestic market for cargo, as import prices are higher in comparison.

One distributor in China said demand for import cargo was visibly weaker in August.

Focus article by Jude Chan

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