October 14th News
Post-holiday phthalic anhydride prices rise in China
According to the commodity market analysis system, as of October 14, the price of o-phthalic anhydride in China was 10633.33 CNY/ton, an increase of 6.16% from the price of 10016.67 CNY/ton on October 1, and an increase of 78.21% from the price of 5966.67 CNY/ton on January 1 at the beginning of the year. After the holiday, the price of o-phthalic anhydride has risen strongly. In October, the supply of o-phthalic anhydride has tightened, leading to a slight increase in prices, which have firmly surpassed the 10,000 CNY per ton mark. The supply is tight, but the downstream demand is weak, resulting in a "strong supply, weak demand" structural market for o-phthalic anhydride. The sustainability of the continuous rise in o-phthalic anhydride prices is questionable.
Raw material costs surge in China
The rise in crude oil prices has been transmitted downstream, with the core driving force behind this round of phthalic anhydride price increases coming from a comprehensive increase in raw material costs. In terms of ortho-xylene, prices have shown an accelerating upward trend. On October 9, the ex-factory price of ortho-xylene was increased by 200 CNY/ton to 9,950 CNY/ton, and on October 12, it was raised again by 200 CNY/ton to 10,150 CNY/ton. The supply of ortho-xylene remains tight, with low inventory levels at refineries and ports, and suppliers are strongly inclined to hold firm on prices. The significant increase in the cost of ortho-xylene-based phthalic anhydride supports the factories' decision to raise prices.
Phthalic Anhydride Supply Tightens in China
Plant maintenance and shutdowns are relatively concentrated. Shandong Hongxin's 110,000-ton facility is shut down, Jining Chen Guang's 40,000-ton facility is shut down, Lianxin Environmental Protection's 100,000-ton facility is shut down, and Zhongtai New Materials' 50,000-ton facility is shut down. One of Changzhou Xinyang's 100,000-ton facilities is shut down, with an overall operating rate of only 35%; Zhuhai Liancheng's 100,000-ton facility has a utilization rate of 40%; Panjin Ruide's 200,000-ton facility has a utilization rate of 50%. After the holiday, facilities at Shandong Weijiao and Shanxi Nuobo are scheduled to shut down, further tightening local spot supply. Some companies are operating at reduced loads, with the industry's overall operating rate dropping to 52%, reducing the amount of commodity spot available. Manufacturers' inventories are low, some companies are oversold, and orders are being limited, leading to a tighter spot market and supporting higher prices.
Phthalic anhydride demand increment in China is insufficient.
The downstream plasticizer industry is the main consumption area for phthalic anhydride. This month, the overall price of plasticizers has increased, providing some demand support for phthalic anhydride. However, the operating load of plasticizer enterprises has shown a slight downward trend, with downstream mainly characterized by rigid demand procurement. Phthalic anhydride is purchased on a need basis, and the incremental pull from the demand side is limited. The decrease in the operating load of plasticizer enterprises has led to a weakening of the rigid demand support for phthalic anhydride, and the price increase is more driven by the cost side rather than the release of demand. The lack of demand growth for phthalic anhydride means that there is little willingness to chase higher prices.
Future Market Prediction
Phthalic anhydride product data analysts believe that after the holiday, there are more maintenance shutdowns of phthalic anhydride equipment, leading to a tightening of supply, but downstream production has decreased, resulting in weaker demand for phthalic anhydride. Phthalic anhydride prices have fluctuated and risen, but the sustainability of the increase is insufficient. In the short term, as the maintenance equipment has not yet fully restarted, the tight supply situation continues, and phthalic anhydride prices will mainly fluctuate at high levels. However, the room for further significant increases is limited, with firm quotes and more discounts in actual transactions. By late October, as maintenance equipment gradually resumes production, the supply will increase; coupled with a gradual weakening of terminal demand, the tight balance between supply and demand will ease, posing a risk of downward pressure on price levels. Downstream buyers should maintain rigid demand procurement and avoid stockpiling at high prices; traders should be cautious about chasing price increases and closely monitor the progress of equipment resumption, DOP production, and the price of ortho-xylene.
