On June 11, the domestic phthalic anhydride market continued its downward trend, driven by the collapse of cost support, ample supply, and sluggish end-user demand. Prices for upstream ortho-xylene and industrial naphthalene fell in tandem, causing production costs to decline steadily. Industry operating rates remained stable with sufficient supply; localized maintenance shutdowns failed to alter the overall loose supply situation. Downstream sectors—plasticizers and unsaturated polyester resins (UPR)—have entered their traditional off-season; purchasing is largely limited to essential needs, and there is greater room for price negotiation. Driven by these combined bearish factors, spot prices for phthalic anhydride continued to slide; trading activity was light, and the market remained generally weak.
I. Domestic Regional Spot Prices (June 11)
As of June 11, the SunSirs benchmark price for phthalic anhydride stood at 8,493.33 RMB/ton, marking a daily drop of 3.12% and a cumulative decline of 4.64% since the beginning of June (when it was 8,906.67 RMB/ton). Current prices are retreating from the mid-to-high range seen earlier in the year. Price quotes vary significantly by production process and region:
Ortho-xylene process phthalic anhydride: Mainstream negotiated prices in East China were 8,500–8,700 RMB/ton, and in Shandong, 8,450–8,600 RMB/ton; Liancheng (Zhenjiang, Jiangsu) quoted 8,800 RMB/ton (negotiable for actual orders).
Naphthalene process phthalic anhydride: Mainstream prices in North China and Shandong were 7,550–7,900 RMB/ton. These prices are significantly lower than those of the ortho-xylene process, with a regional price spread of 500–800 RMB/ton.
Actual market transactions consisted mostly of small orders based on immediate needs. Traders showed a strong willingness to sell, actively lowering prices to facilitate deals, while high-priced goods saw virtually no transactions.
II. Domestic Production, Capacity Utilization, and Long-term Supply Capability
The supply side is characterized by stable operating rates, localized maintenance, and an overall loose supply-demand balance. The domestic phthalic anhydride (PA) industry's comprehensive operating rate currently holds at 70%–75%. While Tongling Chemical’s 80,000-ton *o*-xylene-based unit began maintenance on June 2 (with a restart expected in mid-to-late June), the restart of previously idled units has led to a slight increase in supply in East and North China, contrasting with a slight decline in South China; regional supply disparities remain limited.
Long-term supply capacity is robust: The domestic PA production base is massive, with ample domestic capacity for raw materials like *o*-xylene and industrial naphthalene, alongside smooth import channels, ensuring no risk of supply disruption. The naphthalene-based process offers greater operational flexibility due to stable industrial naphthalene supplies, enabling the industry to maintain long-term, stable output; the prevailing loose supply-demand balance is unlikely to change.
III. Current Enterprise Inventory Status
Inventories continue to accumulate, increasing pressure to move stock. Downstream purchasing has slowed, leading to a slight rise in inventories held by manufacturers and traders, with pressure particularly evident in key sales regions like East China and Shandong. For *o*-xylene-based PA, prices have retreated from highs, dampening traders' willingness to stockpile and favoring a "quick turnover" strategy; conversely, naphthalene-based PA prices remain low, resulting in sluggish inventory turnover. There are no shortages, and the ample inventory continues to suppress any potential price rebound.
IV. Domestic and International Demand Trends
Domestic demand has entered the traditional off-season, characterized by a reliance on essential needs and weak purchasing activity. Key downstream sectors:
Plasticizers (DOP): The industry operating rate has dropped to 53.5% as more enterprises cut operating loads and reduce production; PA consumption has declined, with purchasing limited to essential contractual obligations;
Unsaturated Polyester Resin (UPR): Operating rates saw a slight rebound to 32%, yet orders for end-use construction materials and furniture remain weak; purchasing is cautious, with a strong focus on price negotiation;
End-use sectors: Plastics, coatings, and construction materials are all in their off-season; a lack of order growth has caused a negative demand ripple effect back to the PA sector.
Internationally, prices for PA and its downstream products have weakened in tandem; the lack of a favorable price spread between domestic and international markets keeps export volumes low. Export channels are unable to absorb excess domestic supply, reflecting a similarly loose global supply-demand balance.
V. Upstream-Downstream Price Linkage Analysis
Upstream cost support continues to weaken, dragging down PA prices. The price of the key feedstock ortho-xylene has seen successive reductions; Sinopec’s official list prices have softened, and spot market transaction prices have trended downward. Meanwhile, industrial naphthalene supplies are ample with prices edging down, causing the composite production cost of phthalic anhydride (PA) to decline further and opening up additional room for price drops.
Downstream profit margins are razor-thin, intensifying negative feedback loops. PA prices have fallen, but the magnitude of the decline exceeds that of downstream sectors; losses for ortho-xylene-based PA exceed 300 RMB/ton, while profits for naphthalene-based PA have narrowed to below 800 RMB/ton. This compels downstream buyers to continuously drive down procurement prices, creating a vicious cycle of "falling costs → falling PA prices → downstream price suppression."
VI. Market Outlook
Phthalic anhydride prices are expected to continue their weak, fluctuating downward trend. With room for further declines in the prices of ortho-xylene and industrial naphthalene, cost support remains absent. Amidst loose supply, inventory accumulation, and a persistent downstream off-season—with little prospect for improved procurement—price levels are likely to shift further downward.
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