Uses

Plasticizers – phthalate and non-phthalate-based – in the US are used predominantly (80-90%) in flexible polyvinyl chloride (PVC) to provide plasticity or elasticity to PVC film, roofing, flooring and wall coverings. As additives, they increase the flexibility and durability of the products in which they are used.

Among the major plasticizers, dioctyl phthalate (DOP), di-isononyl phthalate (DINP) and dioctyl terephthalate (DOTP), for example, are mostly general purpose plasticizers used variously in tubing and hoses, flooring, construction materials, electrical cables and wiring and molded plastic products.

Along with its use as a plasticizer, DOP can also be used as a hydraulic fluid, a dielectric fluid and a solvent. DOTP is a non-phthalate plasticizer used in products including plastic films, home flooring and automotive parts, as well as some adhesives, coatings and sealants.

Supply/demand

The US plasticizers market is supplied by domestic producers including Eastman Chemical, BASF and ExxonMobil, and from imports originating from Europe and Asia. Global plasticizers demand is expected to reach 10.5m tonnes by 2020, but worldwide demand is currently assessed at 8.5m tonnes/year. Global capacity, however, was recently assessed at 13m tonnes/year, 67% of which is in Asia, from which most of the near-term demand growth is expected.

In the US, steady supply and demand kept the market stable for the first part of 2018. Sources said demand for some grades will wane in the future following increasing feedstock prices, but this has yet to be generally accepted by the market.

Demand will likely begin to decrease in the winter months as the market enters its usual seasonal lull. Supply is typically tapered to remain steady with the weakened demand.

The Chinese tariffs have thrown supply pressure into the mix, discouraging imports coming in from China. The market is also seeing little interest in Asian imports due to long lead times.

Logistics issues also continue to weigh on the market, adding to costs.

Prices

Beyond supply/demand drivers, plasticizers are heavily influenced by raw materials. While plasticizer values were mostly steady during 2018, with sources expecting little movement for the rest of 2018, there has been upstream pressure.

Propylene has been softening since late this year, though ranging from flat to moderately higher during the year. This typically influences plasticizer values. Further down the raw materials chain, phthalic anhydride (PA) usually settles on the delta of the previous month’s orthoxylene (OX) contract, heavily influencing the prices of DOP and DINP.

US November phthalic anhydride (PA) contract prices increased, tracking an October increase in prices for feedstock OX.

Both PA and its feedstock OX have reached three-year highs as mixed xylenes (MX) prices rose. Supply for MX has been tight, while gasoline demand was unseasonably high during the first half of the year, pushing MX prices higher. Higher crude prices also added upward pressure.

Market conditions for PA are expected to remain steady into December. MX prices have stabilised on a decline in gasoline demand, a decrease in crude prices and the switch to winter-blend gasoline.

2-EH, the feedstock for DOP, DOTP, DOA and trioctyl trimellitate (TOTM), also has remained mostly flat for the year, following propylene.

Technology

Regulatory restrictions and evolving consumer preferences have prompted many plasticizers users to remove phthalates from formulations. Environmental problems with the low molecular weight phthalate-based plasticizers have continued to prompt development of new plasticizers based on renewable resources.

Patents and applications for a dibenzoate plasticizer were granted in Europe, the US, Canada, Russia and in some countries in Asia. Carbohydrates are another class of bio-renewable compounds that are used in new plasticizers development, although research into conventional petroleum-based non-phthalate plasticizers continues.

Outlook

While price movement in the domestic plasticizers market is expected to remain steady, the larger market shifts taking place could influence market dynamics.

Given the growing unpopularity of DINP, many customers are moving toward DOTP, which was recently projected to represent 15% of the global plasticizers portfolio by 2020. DOP continues to be among the most used plasticizers because of its performance, so any migration away from it will be slower.