September 4th news
September Phthalic Anhydride Prices Rise Again in China
According to the commodity market analysis system, as of September 4, the price of ortho-phthalic anhydride was 9483.33 CNY/ton, an increase of 0.89% from the price of 9400 CNY/ton on September 1; and an increase of 5.76% from the price of 8966.67 CNY/ton on August 11. Since late August, the price of phthalic anhydride has stabilized after a period of stagnation, and it rose again on September 3. In September, crude oil prices increased significantly, leading to higher prices for downstream products such as industrial naphthalene and ortho-xylene, with cost support increasing. Additionally, the supply of phthalic anhydride tightened, contributing to another rise in its price in September.
Phthalic anhydride prices in China are rising.
Cost-driven and supply tightening have led to a situation in the Chinese phthalic anhydride market where prices have surged to new highs and are now holding at these elevated levels, with the overall price center moving upward, reaching new highs for the year. Internationally, the CFR price of phthalic anhydride in Southeast Asia has increased for two consecutive weeks, with the latest quote up by $40 per ton from last week. In September, the international market price of phthalic anhydride in China has risen.
Phthalic anhydride cost support is strong in China.
Geopolitical factors, including the U.S.-Iran conflict, continue to escalate, driving consecutive increases in international oil prices and resulting in a generally strong trend for crude oil. Supply of orthoxylene is tight, pushing prices higher; Sinopec has raised its listed price for orthoxylene by 250 CNY/ton to 9,000 CNY/ton. Industrial naphthalene prices have risen sharply, boosting the cost of naphthalene-based phthalic anhydride production. Cost support for both the ortho-process and naphthalene-process phthalic anhydride production methods has strengthened simultaneously, making the phthalic anhydride industry enjoy robust cost support.
Phthalic anhydride supply tightens in China
Zhongshan Liancheng, Jining Chen Guang, and other companies have halted operations for maintenance, while Jiangsu Sanmu has maintained its shutdown. The 260,000 tons/year phthalic anhydride (PA) facility of Fujian Fuhua Gulei Chemical has repeatedly postponed its start-up plan, leading to a decline in the operating rate of China's PA industry to 58%. Industry inventory is low, with most manufacturers maintaining an oversold status, and suppliers are strongly willing to hold prices firm. The new capacity release from Guangdong Lingchuang Chemical's PA facility is limited, resulting in an overall tightening of the PA market supply. There is an expectation of resumption and new capacity release of PA facilities in the South China region, which exerts some pressure on market sentiment, leading to insufficient support for the rise in PA prices.
Phthalic anhydride demand in China lacks support.
According to the commodity market analysis system, as of September 4, the DOP quote was 9792.50 CNY/ton, an increase of 11.27% from the price of 8800.83 CNY/ton on August 1. The DOP price has risen, but transactions at high levels in the market are clearly hindered. The operating rate of the downstream DOP industry in China has declined to 57%, and it is still in a loss state. The resistance from the end-users to the high price of phthalic anhydride has increased, limiting the actual order volume.
Future Market Forecast
Phthalic anhydride product data analysts believe that the market for phthalic anhydride in the first half of September will continue to see a tug-of-war between bullish and bearish factors. Bullish factors include rising prices of ortho-xylene and industrial naphthalene, with strong expectations for cost support; low operating rates of phthalic anhydride facilities, maintaining a tight supply situation. Bearish factors include the expected restart of previously shut-down facilities, anticipated new phthalic anhydride capacity that could suppress price increases, and the need for more time for downstream sectors to absorb high prices, leading to cautious sentiment towards chasing higher prices. Overall, the future trend for phthalic anhydride is likely to be stable with an upward trend, followed by resistance at high levels, leading to a high-price consolidation pattern, with the overall trend stabilizing.
