SunSirs: Bearish Factors Affect the Price of Phthalic Anhydride Continues to Fall

The Phthalic Anhydride (PA) commodity index was 62.41 on 4^th November, decease at 0.49 points from yesterday, 48.05% lower than the highest point at 120.13 of the period since 28^th February 2012, and 28.89% higher than from the lowest point at 48.42 since 21^st January 2016 (Note: The period refers to since 1^st September 2011).

Recently, the domestic PA market price continued to fall. The market price of PA in East China was weak. The downstream factories maintained the exact need for procurement. The pressure of factory inventory increased. The high-end transactions were blocked with increasing of inventory of manufacturers. The market price of PA continued to be low. The mainstream supply of adjacent process in East China is 6400-6700 RMB/t. The mainstream of naphthalene PA supply is 5800-6000 RMB/t; the mainstream price of PA market in North China is 6200-6400 RMB/t. Most of manufacturers were correcting their price. The operating rate of downstream was fairly low. And downstream factories maintain on-demand procurement and have a strong wait-and-see attitude. Domestic PA plant run stably and the supply of phthalic anhydride is sufficient, which is coupled with the poor downstream demand of it. To be more specific, the demand for PA has decreased, and the price trend of PA has continued to decline.

In terms of upstream players, China National Petroleum and Gas Corporation (Sinopec Group) execute upstream product price of PA—O-benzene was 6,200 RMB/t. Some of domestic benzene factories restarted their maintenance of equipment. The supply of PA in the market increased. The market atmosphere of importing benzene became light, with dropping quotation. The market atmosphere for the recent port benzene went light as well. The port stocks were low. The price of phthalate external disk fluctuated and fell. The actual transaction price was subject to negotiation with the actual price discussed in detail. Due to the falling price of raw material, which is benzene, the market price trend of PA continued to decline.

In terms of downstream, DOP prices have fallen slightly. Isooctanol prices have fallen. The cost of DOP has fallen. DOP price fluctuates. The demand of DOP downstream is fair. Customer procurement enthusiasm is generally fair. The price of downstream PVC shakes down. DOP high-end transaction is blocked. Its mainstream transaction price fell slightly to 7400-7700 RMB/t. The downstream price has a decline, plus upstream OX price dropping. Meanwhile, the cost of DOP decline as well. It is expected that the market price of PA will maintain a slight decline in the later period.

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