As the Lunar New Year approaches, overall demand in the Asian plasticizer market is likely to slow. There are three reasons:
1. Buyers remain cautious
2. Cost pressure on manufacturers remains
3. The seller hopes for the demand after the festival
On the other hand, due to the recent rising trend of raw material prices, with the rising cost, it is unlikely that manufacturers will make the goods cheaper at this juncture.
The price of upstream propylene and 2-ethylhexanol (2-EH) is stronger, because some producers reduce production, while others seriously consider reducing operating rate, leading to tight supply.
Most parts of Northeast Asia and Southeast Asia are celebrating the lunar new year. January 25 is the lunar new year. From January 24, China will have a full week off.
Buyers of plasticizers can take advantage of the long holiday as an opportunity to further study the market. The purchase is still cautious, the demand has not increased significantly, and the downstream demand after the festival is uncertain.
After the festival, some buyers may find that their inventory is low, and some manufacturers may hold more goods, because the Northeast Asia plant has no planned outage.
Investors have turned to look at the price trend of previous years to find some clues about the market trend.
For dioctyl phthalate (DOP), spot prices in East Asia after the lunar new year have been rising since 2017, although the increase in 2019 is relatively small.
According to ICIS data, on January 9, 2020, the average spot price of DOP was assessed as $940 / T CFR East Asia, up $5 / T from the previous week.