Plasticisers supply in Europe has been gradually tightening since the start of the summer of 2020 but tightness has reached a new level in the past month, as production issues are mounting due to new unplanned outages, leading to a spike in commodity plasticisers prices across the board. While raw material prices have also sharply increased, and played their part in the negotiations, shortages in supply are becoming the biggest and more important factor.
DOTP was the first plasticiser to be affected by this supply reduction, mainly due to a sharp drop in imports from Asia. While this reduction had already taken place in the second quarter it became more apparent later in the year as demand continued to recover gradually in the region while availability remained reduced.
This had a knock-on effect on DINP demand (and supply), as especially compounders have been adjusting formulations to increase DINP use to offset the loss of DOTP. To an extent this is also the result of the wider gap between DOTP and DINP prices over the last few months. However, the situation reached a new level when BASF declared force majeure on plasticisers, amongst other products, following a fire at the hydrogen unit at Ludwigshafen, Germany earlier this month. As the company is the largest plasticiser producer in the region this has had a significant impact in the market. As far as commodity plasticisers is concerned this has significant and wider implications for availability of DINP (and DINCH) and DPHP in the region.