OUTLOOK ’18 – Europe plasticizers positive for 2018, market awaits new DOTP capacity

LONDON (ICIS)–European plasticizer markets are largely expected to have a positive 2018, buyers and sellers agree.

“Growth rates at accounts are at 3-5% and we hope we can accommodate this, as long as production runs well,” one producer said.

Economies and demand are due to remain fairly strong and buyers expect it will be a smoother ride in terms of supply compared to that experienced in 2017.

With regards to planned outages, there are “normal” maintenance works scheduled but nothing that should cause any disruption, according to some.

Indeed, Grupa Azoty Zak are due to increase nameplate capacity of dioctyl terephthalate (DOTP) by 15,000 tonnes/year “sometime in Q3,” a company source announced in November.

The site in Kedzierzyn, Poland, has a current nameplate capacity of 60,000 tonnes/year and the company plans to get more involved with speciality plasticizers in 2019.

Hot on the heals of this, Oxea announced it will market 60,000 tonnes/year of DOTP from a new unit in Germany that will start up in 2019.

The only surprise about this announcement was that the company had said in April 2017 that it would phase out production of DOTP at its Amsterdam site in order to focus more on other plasticizers.

In November, SIBUR said it started construction of its 100,000 tonne/year DOTP plant in Perm, Russia. The project had been revealed in June and the majority of the volume is expected to supply local markets.

The additional volume due to come on stream in 2018 is expected to be easily absorbed in Europe.

“Europe is the only region that is not self-sufficient and it always relies heavily on imports,” one producer commented.

“Of course we welcome the announcement of new capacity; the more material the better,” one customer said, but added that it was “confident” 2018 would throw fewer hurdles in the way of sourcing material required.

Referring to the increased capacity, another seller noted that “the European market is ready for it.”

Some sources said there will be the inevitable conversion to phthalate-free plasticizers in the years ahead and most feel that by 2020 there will be far fewer applications using diisononyl phthalate (DINP) and a natural switch to DOTP is the most likely trend.

There is little price advantage of using DINP these days and with a more diverse number of DOTP suppliers some said the consumer pull towards DOTP was already being seen at some accounts.

One buyer said, “We are quite positive for our own volumes and availability should be fine as things have normalised”, following the unexpected production issues of 2017.

As such, the market is expected to remain balanced to tight until all this new planned capacity comes online.

One source suggested that contract volumes would increase in 2018, resulting in a quieter spot market. It added: “There has been an element of hand to mouth at the moment as there has been a bit of backlog to catch up on.”

Sources will continue to monitor developments from a legislative point of view, as well as the usual key influencing factors of feedstock prices, trade flows and demand/supply balances.

Plasticizers are used in plastics or other materials to impart viscosity, flexibility, softness, or other properties to the finished product.

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