OUTLOOK ’18: Asia plasticizers prices to see minimum fluctuations in Q1

SINGAPORE (ICIS)–China’s plasticizers market is not expected to see too much fluctuations in the early weeks of 2018.

While the spot markets in China could see a certain amount of support in the run up of the Lunar New Year, the supply and demand dynamics will largely remain in the balance.

In 2018, demand for diiononyl phthalate (DINP) is expected to pick up in Japan from the housing sector.

There is at least one northeast Asian producer looking to purchase more feedstock isononanol (INA) in 2018 to capitalise on this increase in demand.

Elsewhere in Turkey, anti-dumping duties (ADD) on South Korean imports of dioctyl phthalate (DOP) and dioctyl terephthalate (DOTP) have been imposed.

Imports of these plasticizers will incur a duty of 7.99-12.57% over the cost and freight with insurance (CIF) value.

While the latest ADD may come as a blow to South Korean producers, they were generally confident that demand from other regions would be able to offset any potential loss of export to Turkey. That could mean more cargoes staying in Asia.

In 2017, supply and demand situation was largely balanced in northeast Asia but there were occasional uptick in prices, namely in July, led by short supply in domestic China.

The short supply was the result of environmental inspections by the authorities as some plants were shut or running at lower operating rates.

Plasticizers prices were also impacted by developments in Europe and in the US.

In the middle of the year, Asian export of DINP increased to supplement production losses in Europe after Evonik declared force majeure on its plasticizers after an explosion and fire at its Antwerp facility.

In the third quarter, exports of DINP increased once again, this time to the US in the aftermath of Hurricane Harvey.

Demand from the US has remained healthy from the northeast Asian producers’ point of view until the traditional lull at the end of the year.

China’s DINP import prices gained 13.5% in the first 11 months of 2017, to average around $1,117.5/tonne CFR (cost and freight) China in early-November, according to ICIS data.

In the FOB (free on board) NE (northeast) Asia market, DINP gained some 18.2% over the same period to about $1,200/tonne FOB NE Asia.

DOTP gained some 17.5% in January to November 2017 in the Chinese import market to about $1,210/tonne CFR China.