June 7th news
Phthalic anhydride prices in China have fallen significantly.
According to the commodity market analysis system, as of July 6, the price of o-phthalic anhydride was 7733.33 CNY/ton, a fluctuating decrease from the June 30 price of 7933.33 CNY/ton, with a price decrease of 2.52%. Compared to the June 1 price of 8683.33 CNY/ton, there has been a significant drop, with a price decrease of 10.94%. The price of o-phthalic anhydride in July fell by 200 CNY/ton, and since June, the price has plummeted by 950 CNY/ton, with the Chinese market for o-phthalic anhydride experiencing a substantial decline.
Phthalic anhydride prices in China have significantly declined.
The U.S. and Iran have reached an agreement, causing the geopolitical risk premium in the Middle East to rapidly subside. As a result, international crude oil prices have experienced volatile downward movements. In the aromatics industry chain—from crude oil to xylene to ortho-xylene—cost transmission is evident: Sinopec has lowered its listed price for ortho-xylene, leading to a decline in the cost of ortho-phthalic anhydride. Simultaneously, industrial naphthalene has also weakened, further reducing the cost of phthalic anhydride feedstock. Meanwhile, the two major downstream sectors—DOP and unsaturated resins—are in the off-season, prompting factories to show insufficient willingness to replenish inventories; plant operating rates have dropped to around 50%. Market transactions are sluggish, and demand for phthalic anhydride remains weak. The volatile and declining trend in international crude oil prices has further intensified bearish market sentiment, driving down phthalic anhydride prices.
Phthalic anhydride cost support in China has decreased.
After the easing of tensions between the US and Iran, international crude oil prices fell significantly, directly impacting the aromatics industry chain: as of July 6, the listed price of ortho-xylene was 7,800 CNY/ton, a decrease of 1,400 CNY/ton from the price of 9,200 CNY/ton on June 1. The significant drop in raw material prices led to a decrease in phthalic anhydride costs, and industrial naphthalene followed the overall weakening trend in the chemical market, with the focus of raw materials shifting downward. Additionally, the decline in crude oil prices further increased the expectation of falling raw material prices, leading to a reduction in cost support for phthalic anhydride.
Phthalic anhydride supply is low in China.
On the supply side, the operating enthusiasm of phthalic anhydride enterprises in China is low, with some facilities running at low capacity for a long time or shutting down. The overall operating rate of the industry has slightly decreased to 50%. Both factory and port inventories remain low, with no large-scale inventory accumulation; downstream purchases have contracted, and there is a relative oversupply of spot goods in circulation.
Phthalic anhydride weak demand
The traditional off-season for the downstream plasticizer industry has led to a decrease in operations to 40-50%. Demand from terminal sectors such as real estate and construction materials has not seen any substantial improvement. Downstream product manufacturers are adopting a "buy-as-you-need, zero inventory" approach, completely avoiding locking in raw material prices in advance, which results in resistance to high phthalic anhydride prices. This, coupled with the continuous decline in DOP finished product prices, is putting downward pressure on phthalic anhydride procurement prices. International market prices for phthalic anhydride are falling, leading to a reduction in export orders from China, increasing the surplus pressure on phthalic anhydride, and weakening the support for its price increase.
Future Market Forecast
Phthalic anhydride product data analysts believe that on the cost side: crude oil and ortho-xylene have significantly declined; on the demand side: the traditional off-season for downstream continues. The main issue is the off-season demand, and the continuous decline in costs continues to drag down the market. Low production levels can only slow down the rate of decline but cannot reverse the weak trend. In summary: it is expected that the phthalic anhydride market in China will continue to show a weak downward trend.
