DINP demand expansion is unsatisfactory

Release Date: 2014-03-28

The California Office of Environmental Health Hazard Assessment (OEHHA) has added DINP to California's Proposition 65 list of carcinogens, which became effective on December 20, 2013. According to Proposition 65 requirements, all products containing DINP sold in California must carry a warning label. As of the effective date, businesses have one year to remove DINP from their products or add warning labels.

It is worth noting that after this regulation takes effect, it will impact domestic manufacturers exporting products with DINP as a raw material. Some downstream factories have already begun to consider raw material issues, which will curb the expansion of DINP demand.

Unit: Ten Thousand Tons/Year

Based on the current use of plasticizers, DOP remains the primary plasticizer, thus Chinese DOP factories account for the absolute majority. Due to the similar production processes of phthalate plasticizers like DOP and DINP, with only slight differences in raw materials, most domestic plasticizer manufacturers, excluding subsidiaries of Taiwan's Lih-Sheng such as Zhenjiang Lih-Sheng, Zhuhai Lih-Sheng, and Zhongshan Lih-Sheng, and ExxonMobil Chemical's standalone DINP production facility in Panyu, are not purely DINP producers. As they primarily produce DOP, they generally do not have dedicated DINP reactors and instead use the same reactors for multiple products like DOP. Due to the complete reliance on imported isononanol (INA) for raw materials, procurement is difficult. Major INA suppliers primarily serve their core customers, leading to fixed INA procurement for customers through "one-on-one" sales. Consequently, the number of major domestic DINP producers remains relatively stable and has not changed significantly.

Therefore, the manufacturers listed in the table above are basically the main DINP producers in China. However, as many domestic plasticizer factories do not differentiate reactors for different plasticizers, it is difficult to accurately count the actual production capacity for different types of plasticizers. Thus, the theoretical capacity statistics may be slightly higher than the actual total DINP production capacity.

In recent years, the expansion of DINP production capacity has been relatively slow, mainly due to the supply limitations of the raw material isononanol. Currently, isononanol in China still relies entirely on imports. Maoming Petrochemical's isononanol project is expected to be completed around 2015. If the supply channels are unstable, DINP products cannot be supplied stably. In response, most domestic factories are cautious and dare not rashly build new DINP projects.

Following the introduction of California's Proposition 65, while a reduction in the use of DINP in factories is inevitable, the glove and wallpaper industries, as major downstream sectors of DINP, are not easily replaceable by other products. Most downstream factories indicate a wait-and-see approach. Currently, although there are many types of so-called environmentally friendly plasticizers, most products are not widely available and are expensive. Products with lower prices, such as DOTP, face difficulties in replacing DINP due to process issues. Therefore, the demand for DINP will not significantly shrink in the short term, but its expansion space will also be very limited.