Cost-driven fluctuations and decline in phthalic anhydride market prices in 2025; prices may first strengthen and then stabilize in 2026

January 8th News

Phthalic Anhydride Market Prices in 2025 to Experience Volatile Declines

According to the commodity market analysis system, as of December 31, the price of o-xylene phthalic anhydride in China was 5966.67 CNY/ton, a fluctuating decline from the January 1 price of 6600 CNY/ton, with a price decrease of 9.60%. In 2025, the phthalic anhydride market in China showed a trend of fluctuating downward and rebounding at the end of the year, with the average annual price of o-xylene phthalic anhydride in East China at 6653.97 CNY/ton, a 9.60% decrease from 2024, reaching a new low in the past three years. The phthalic anhydride industry underwent a deep adjustment due to the triple pressure of falling raw material prices, oversupply, and weak demand downstream.

Phthalic anhydride costs in China have decreased.

On December 31, Sinopec’s o-xylene quote was 5,800 CNY/ton, a significant drop from the January 1 price of 6,700 CNY/ton—a decrease of 13.43%. For the entire year of 2025, the average o-xylene price is expected to fall by about 12% compared to 2024. At year-end, o-xylene prices saw a slight rebound, while phthalic anhydride costs declined. As the cost support for phthalic anhydride weakens, downward pressure on phthalic anhydride prices will intensify in 2025.

Phthalic anhydride capacity expansion, oversupply in China

China's total phthalic anhydride capacity is about 2,400,000 tons (with 1,630,000 tons from the o-xylene method and 770,000 tons from the naphthalene method). In 2025, the new capacity added is about 50,000 tons, which is a new o-xylene method phthalic anhydride plant built by Aekyung (Ningbo). The operating rate of phthalic anhydride in 2025 fluctuates between 50% and 75%, with the o-xylene method maintaining an operating rate of 60% to 75%. Due to cost pressure, the naphthalene method only has an operating rate of 50% to 60%. The operating rate of phthalic anhydride is relatively high, leading to an overall oversupply of phthalic anhydride.

Demand Side: DOP Prices to Fluctuate and Decline in 2025

According to the commodity market analysis system, as of December 31, the DOP price was 7,325.84 CNY/ton, a decrease of 10.95% from 8,226.25 CNY/ton on January 1. In 2025, the DOP price first stabilized and then fell, with a slight rebound at the end of the year. The overall price level for the year was significantly lower than in 2024. Weak demand downstream increased the downward pressure on phthalic anhydride prices. More than 60% of the demand for phthalic anhydride relies on the plasticizer industry, such as DOP. In 2025, the operating rate of DOP enterprises in China was only 50%-65%. As the DOP market declined, purchases of phthalic anhydride were cautious, mainly driven by rigid demand, with low inventory levels, leading to significant downward pressure on phthalic anhydride.

Future Market Prediction

Phthalic anhydride product data analysts believe that in 2025, the oversupply of phthalic anhydride and the decrease in costs led to a fluctuating decline in phthalic anhydride prices. In summary, in terms of costs, there will be no new capacity for ortho-xylene in China in 2026, and some companies' facilities will switch to producing PX, coupled with the expected maintenance in the Asian market in the second quarter, the price of ortho-xylene in 2026 may fluctuate and rise, increasing the cost support for phthalic anhydride; in terms of supply, the operating rate of phthalic anhydride was relatively high in 2025, and it is expected to decrease in 2026, with no new capacity for phthalic anhydride, leading to an expected decrease in the supply of phthalic anhydride in 2026; in terms of demand, with the relaxation of real estate policies, the demand for plasticizers is expected to recover, providing ongoing support for the demand for phthalic anhydride. Looking ahead, with the cost support and the imbalance between weaker supply and stronger demand, the price of phthalic anhydride in 2026 is expected to fluctuate and rise, possibly reaching a peak in the second quarter before stabilizing at a lower level.