On December 12, 2022, the domestic octanol price and its downstream plasticizer product prices rose significantly. Octanol prices rose 5.5% month on month, and the daily prices of DOP, DOTP and other products rose by more than 3%. Most enterprises’ offers rose significantly compared with last Friday. Some of them held a cautious wait-and-see attitude, and temporarily maintained the previous offer for real order negotiation.
Before the next round of increase, the octanol market was tepid, and the factory price in Shandong fluctuated around 9100-9400 yuan/ton. Since December, due to the sharp drop in the international crude oil price and the lack of operational confidence of practitioners, the price of plasticizers has declined. On December 12, the overall price of the industrial chain rose, mainly driven by the following factors:
First, a set of butyl octanol unit in South China was shut down for maintenance in early November. The planned maintenance was to the end of December. The weak balance of domestic octanol supply was broken. The downstream plasticizer enterprises in South China purchased from Shandong, and the inventory of the leading octanol plants was always at a relatively low level.
Second, due to the devaluation of RMB and the opening of arbitrage window caused by the price difference between internal and external markets, the recent increase in octanol exports has aggravated the tight situation of domestic supply. According to customs statistics, in October 2022, China exported 7238 tons of octanol, a month on month increase of 155.92%. From January to October, China exported 54,000 tons, a year-on-year increase of 155.21%.
Third, in December, the national level optimized epidemic prevention policies, and gradually opened up in various regions. Macroeconomic expectations were good, and the demand for antigen detection reagents was on the rise. Many regions began to pilot antigen self-test. The antigen self-test box is a plastic product. The upper cover and lower cover of the cartridge are plastic parts, mainly made of PP or HIPS, and are produced by injection molding. With the upsurge of antigen detection market in the short term, medical plastic products manufacturers, injection molding machine manufacturers and mold manufacturers may face a wave of opportunities, which may bring a wave of rising market for plasticizer products.
Fourthly, it is reported that during the weekend, large-scale plasticizer factories in Henan and Shandong concentrated in the market to purchase octanol. Under the tight supply of octanol, the possibility of price increase increased, which also became the direct trigger for this round of price increase.
It is expected that the octanol and DOP/DOTP markets will mainly absorb this round of increase in the short term, and the resistance to price rise will increase. Due to the large increase in the market recently, the terminal and downstream customers are hesitant and resistant to the high price plasticizer, and the high-end quotation lacks a large number of actual orders to follow up, which also reduces their price support for octanol. In addition, the decrease of 400 yuan/ton for o-xylene will increase the downward pressure on the price of phthalic anhydride, another raw material of plasticizer. Affected by the low price of crude oil, PTA is unlikely to rebound significantly in the short term. From the perspective of cost, it is difficult for the price of plasticizer products to continue to rise. If the high cost of plasticizer cannot be passed on, its bargaining sentiment towards octanol will rise, which does not rule out the possibility of falling back after the stalemate. Of course, the supply side of octanol will also inhibit its later exploration pace.