Diisononyl Phthalate Market Continues the Bullish Trend in March 2024 Amidst Uncertainty

Genoa (Italy): Diisononyl Phthalate (DINP) witnessed strong buying activities in March, with prices rising by 4% monthly. This significant price acceleration was supported by a multitude of factors, with the primary driver being the increasing crude and gas prices in Europe and Germany, partly due to oil output shortages and growing demand for natural gas from the Asian region. Market intelligence suggests that strong inventory pressure persists in Europe despite elevated interest rates and inventory trimmings undertaken in FY23. Furthermore, challenges in the Suez and Panama Canals are reducing the flow of trade between Asia, the Americas, and Europe. In this context, the improvement of DINP prices is crucial for the European chemical industry.

In European markets, DINP prices follow cyclical patterns, with an increase in demand alternately triggering price escalations, particularly in the PVC supply chain for customized products, especially in the construction sector. In December 2023, prices were at their lowest for FY23, estimated around USD 1450 per ton CFR Genoa, marking a year-on-year fall of 34%. BASF, a major supplier of DINP to Italian markets, observed significant downturns and lower operating rates. However, in January 2024, signaling a rate cut by the US Fed triggered a bullish rally across the PVC and DINP markets, which had previously been subdued and trimmed of their capacities. Italian importers turned bullish and increased their inventories, while the Meloni government continued the 'superbonus,' supporting the construction sector in Italy in FY24. Similarly, German markets experienced domestic tightening of DINP supply, despite the construction sector remaining in turmoil, as consumer and business confidence remained positive. Sentimental buying in the domestic market since January 2024 in German markets has significantly raised prices from $1450 per ton observed in December to USD 1590 per ton in March 2024. While this bullish rise appears to be driven by rising demand and inventory expansion, an internal study by ChemAnalyst observed that supply disruptions and transportation costs for importers and suppliers remain major concerns. FY23 saw significant trimming of shipping capacities globally, while supply disruptions from Houthi attacks on the Red Sea in December prompted shipping suppliers to revert to the Cape of Good Hope route across Asia-Northern Europe. This has also increased demand for Korean DINP supply into Europe, partly due to supply disruption and partly due to Germany and the Netherlands experiencing a shortage of raw materials.

Netherlands and Italy, along with Poland, Austria, and France, are experiencing a turnaround in their construction activities, driven by sustainable transition acceleration, which is putting inventory pressures on DINP supply. Prices of plasticized PVC FOB Genoa are following the DINP pricing trends, with upward price revisions of 12% since the beginning of the year. March saw a significant rise due to limited supply of raw materials from the Middle East to German and Dutch upstream companies, with downstream suppliers increasing their DINP price quotations as crude and gas prices in Europe began their upward trend at the beginning of the month.

ChemAnalyst maintains the forecast of a 4% monthly upward price trend for DINP supply for the next two months, owing to continued supply disruptions and falling mortgage rates across the European Union, especially in the UK, Netherlands, and Italy.