Phthalic anhydride prices rose again in September

According to the commodity market analysis system of SunSirs, the quoted price for ortho-xylene-based phthalic anhydride stood at 9,483.33 RMB/ton as of September 4. This represents a 0.89% increase from the price of 9,400 RMB/ton on September 1 and a 5.76% rise from the 8,966.67 RMB/ton recorded on August 11. After stabilizing in late August, the price of phthalic anhydride rose again on September 3. Significant and continuous increases in crude oil prices in September have impacted downstream markets, driving up the prices of industrial naphthalene and ortho-xylene; this has strengthened cost support. Coupled with tightening supply, the price of phthalic anhydride has risen once more.

Phthalic anhydride market was rising

Driven by cost-push factors and tightening supplies, the domestic phthalic anhydride market surged before settling into a stalemate at high levels; overall price levels shifted upward, challenging new highs for the year. Internationally, CFR quotes for Southeast Asia rose for two consecutive weeks, with the latest price increasing by $40 per tonne compared to the previous week. Both domestic and international phthalic anhydride markets saw price gains in September.

Cost support for phthalic anhydride was strong

Geopolitical factors, such as the US-Iran conflict, continue to intensify, driving a sustained rise in international oil prices and a bullish trend for crude oil. Meanwhile, tight supply and rising prices for ortho-xylene have prompted Sinopec to raise its listed price by 250 RMB/ton to 9,000 RMB/ton. Industrial naphthalene prices have surged significantly, driving up production costs for naphthalene-based phthalic anhydride. With cost support strengthening for both the ortho-xylene and naphthalene production routes, the phthalic anhydride industry is underpinned by robust cost support.

Phthalic anhydride supply tightened

Enterprises such as Zhongshan Liancheng and Jining Chenguang have halted operations for maintenance, while Jiangsu Sanmu remains shut down; meanwhile, Fuhua Gulei Chemical has repeatedly postponed the startup of its 260,000-ton/year phthalic anhydride (PA) unit, causing the domestic industry's operating rate to drop to 58%. Industry inventories are low, with most manufacturers maintaining an oversold position and holders showing a strong determination to support prices. Although Guangdong Lingchuang Chemical has brought some new PA capacity online, the volume is limited, resulting in an overall tightening of market supply. However, expectations regarding the restart of existing PA units and the release of new capacity in South China are weighing on market sentiment, limiting the support for price increases.

Insufficient demand support for phthalic anhydride

According to the commodity market analysis system of SunSirs, the quoted price of DOP stood at 9,792.50 RMB/ton as of September 4, marking an 11.27% increase from the 8,800.83 RMB/ton recorded on August 1. Although DOP prices surged, high-level market transactions faced significant resistance. Operating rates in the downstream DOP sector fell to 57% with the industry remaining unprofitable; meanwhile, resistance among end-users toward high-priced phthalic anhydride intensified, limiting the volume of actual orders.

Market Outlook:

Analysts at the SunSirs Phthalic Anhydride (PA) division anticipate a continued tug-of-war between bullish and bearish forces in the market during the first half of September. Bullish factors include rising prices for ortho-xylene and industrial naphthalene, which continue to provide strong cost support, alongside low operating rates for PA production facilities that maintain a tight supply situation. Bearish factors include the expected restart of previously idled units and anticipated new capacity, which may cap price increases; additionally, downstream sectors require time to absorb higher costs, leading to a cautious approach toward chasing rising prices. Overall, the market outlook suggests a trend of stability followed by a rise, before facing resistance and pulling back from highs; in the short term, prices are expected to fluctuate at elevated levels while generally stabilizing.

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