USES

Plasticizers – phthalate and non-phthalatebased – are used 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. Along with its use as a plasticizer, dioctyl phthalate (DOP) can also be used as a hydraulic fluid, a dielectric fluid and a solvent. Dioctyl terephthalate (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 supply and demand situation has been largely balanced in northeast Asia during the year, but there were occasional upticks in prices, namely in July, caused by short supply in China. The short supply was attributed to environmental inspections by the authorities as some plants were shut or running at lower operating rates. Supply in the domestic China market was largely snug until the middle of October, when prices started their downtrend in line with the end-of-the-year lull. Plasticizers prices were also impacted by developments in Europe and in the US this
year. In the middle of the year, Asian exports of diisononyl phthalate (DINP) increased to ease production losses in Europe after Evonik declared force majeure on its plasticizers in Europe 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 since then and will continue until the seasonal lull at the end of the year.

PRICES

With the year winding down to a close, plasticizers markets will enter into a traditional lull season. Plasticizers prices in the Chinese domestic market were generally weak since late October as demand from the downstream PVC market fell. Prices in the import market took a hit as well. DINP and DOTP, however, enjoyed some support at the start of the third quarter as markets in North America show more demand compared to Asian markets.  Late in November, one northeast Asian producer of 2-ethylhexanol (2-EH) decided to bring forward and extend its turnaround, and that may have some impact on DOP and DOTP spot prices.

TECHNOLOGY

DOP and DINP are produced by the esterification reaction of an alcohol with phthalic anhydride (PA), using a catalyst. For DOP, 2-EH is used, while isononyl alcohol is used for DINP. After esterification, excess alcohol is removed and the plasticizer is filtered. This is typically done in a batch reactor. 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.

OUTLOOK

Demand in the final quarter is expected to weaken in Asia during the festive season. Looking ahead into 2018, demand for 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. Meanwhile in Malaysia, one producer is aiming to open a new plasticizer plant with a combined capacity of about 120,000 tonnes/ year some time at the start of 2018. The plant is expected to house DINP and DOTP units and one unit producing speciality plasticizers. Elsewhere, in Turkey antidumping duties (ADDs) on South Korean imports of DOP and DOTP have been imposed. Imports of these plasticizers will incur a duty of 7.99-12.57% over the cost, insurance and freight (CIF) value, according to sources. While the latest ADD may come as a blow  to South Korean producers, they were generally confident that demand from other regions could offset any potential loss of exports to Turkey.