Phthalic anhydride prices fell from high levels in August

According to the commodity market analysis system of SunSirs, the quoted price for ortho-xylene-based phthalic anhydride stood at 8,966.67 RMB/ton as of August 11, marking a decline from the August 1 high of 9,283.33 RMB/ton. Throughout August, crude oil prices underwent wide-ranging fluctuations; this volatility transmitted downstream, causing industrial naphthalene prices to retreat from their highs while ortho-xylene prices remained temporarily stable. With cost support weakening, the price of phthalic anhydride fell from its high level.

Phthalic anhydride prices retreated from their highs

Tensions in the Middle East continue to escalate across multiple fronts, characterized by an interplay of military conflicts, diplomatic maneuvering, and maritime security incidents, with no signs of easing in the near term. Crude oil prices are fluctuating within a wide range; regarding cost transmission along the aromatics chain (crude oil → xylene → ortho-xylene), Sinopec’s posted price for ortho-xylene has stabilized after halting its rise, while industrial naphthalene prices have weakened and fallen, lowering raw material costs for phthalic anhydride (PA). Markets for DOP and unsaturated resins are consolidating at high levels, but downstream operating rates have dropped to around 51%, weakening demand support for PA. Operating rates among PA producers remain stable; however, with some units resuming production after maintenance, industry-wide operating rates are expected to rise, leading to increased market supply pressure.

Cost support for phthalic anhydride weakened

In August, international crude oil prices consolidated at high levels, directly impacting the aromatics industry chain. As of August 11, the listed price for ortho-xylene remained steady at 8,500 RMB/ton—unchanged from August 1—while the quote for industrial naphthalene dropped to 5,400 RMB/ton. With raw material prices drifting downward, cost support for phthalic anhydride has weakened.

Phthalic anhydride supply remained stable while inventories accumulated.

On the supply side, some phthalic anhydride production units have resumed operations following maintenance, and operating rates are expected to rise; the industry-wide operating rate remains steady at approximately 59%. Overall production is stable, while factory and port inventories are slowly accumulating, leading to a decline in manufacturers' willingness to hold firm on prices.

Support for phthalic anhydride demand weakened

According to the commodity market analysis system of SunSirs, the quoted price for DOP stood at 8,800.83 RMB/ton as of August 11, remaining unchanged from the August 1 level and showing a trend of stable consolidation. Due to sluggish shipments and poor profitability, the downstream plasticizer industry is limiting its procurement of phthalic anhydride to essential needs while pressing for lower prices. Meanwhile, with end-use sectors such as coatings and PVC products entering their seasonal off-peak period, the operating rate of the plasticizer industry has dropped to 51%, further dampening demand. Additionally, exports have faced certain headwinds. With the support for phthalic anhydride demand weakening, downward pressure on its price is intensifying.

Market Outlook

Analysts at SunSirs monitoring phthalic anhydride (PA) data believe that, with end-user demand in the off-season and downstream resistance to high-priced raw materials, purchasing will likely remain limited to immediate needs. Cost-side support is limited: industrial naphthalene prices are expected to soften slightly, further weakening cost support for naphthalene-based PA. Supply pressure remains manageable: while there are expectations of production restarts and a slow accumulation of inventory, overall industry stock levels remain low, and the volume of available spot goods is limited; consequently, there is little room for PA prices to fall further. The PA market is expected to remain sluggish in the short term, with price levels likely to drift slightly lower.

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