Lead-in: Following the National Day holiday, a surge in aromatic futures was driven by tight crude oil supply, creating a bullish market atmosphere. Combined with the persistent shortage of raw material o-xylene and rising costs, domestic phthalic anhydride (PA) prices rebounded.
Cost Support Drives PA Price Surge
Specifically, this period saw price increases for Jiangsu-based o-xylene process PA, with prices fluctuating between RMB 9,800–10,250/ton. Hebei-based naphthalene process PA prices also rose, ranging from RMB 8,800–9,100/ton. The rebound in domestic PA prices was primarily driven by cost-side factors. Strong support from the upstream aromatic industry chain, coupled with an intensifying shortage of o-xylene, led to a decline in capacity utilization within the o-xylene process PA sector. This resulted in tighter supply of Jiangsu o-xylene process PA. Additionally, concentrated maintenance shutdowns at naphthalene process PA plants contributed to the market's upward momentum.
Recently, due to the persistently high price gap between domestic o-xylene and naphthalene process PA, naphthalene process PA has partially substituted for o-xylene process PA. Consequently, inventories of domestic naphthalene process PA are generally oversold. Due to its relatively lower price compared to o-xylene process PA, the naphthalene process PA market has often been the leading driver in each market rebound. Since mid-to-late September, rapid declines in industrial naphthalene prices caused the cost support for the naphthalene process PA sector to collapse. This widened the price gap between o-xylene and naphthalene process PA back to RMB 1,000/ton, stimulating renewed transaction activity in the lower-priced naphthalene process PA market.
| Figure 1: Trend of Domestic O-Xylene-Phthalic Anhydride Market Prices (Unit: RMB/ton) | Figure 2: Trend of Price Gap Between East China O-Xylene Process PA and Hebei Naphthalene Process PA (Unit: RMB/ton) |
|---|---|
| Source: Chempricehub | Source: Chempricehub |
Decline in PA Industry Supply
Affected by insufficient o-xylene supply and equipment issues, domestic PA industry capacity utilization has shown a continuous downward trend recently, leading to sustained reductions in market supply. According to Chempricehub data monitoring, following the National Day holiday, domestic PA industry capacity utilization dropped to 54%, a decrease of 5% compared to pre-holiday levels and 11% year-on-year. Impacted by o-xylene shortages, capacity utilization in the o-xylene process PA sector fell to 49%. Meanwhile, increased maintenance at naphthalene process PA plants—due to catalyst and equipment issues—drove capacity utilization in that sector down to 59%.
Regionally, the o-xylene supply shortage in East China has intensified tight supply conditions for o-xylene process PA in parts of the region. While South China shows slight oversupply, planned maintenance at Gulei Chemical’s PA unit is expected to cause another drop in national o-xylene process PA capacity utilization next week. This will alleviate supply pressure in the o-xylene process PA sector, providing strong support to the market. Similarly, concentrated maintenance in the Northern naphthalene process PA sector is expected to worsen supply tightness in the coming period.
| Figure 3: Trend of Domestic Phthalic Anhydride Industry Capacity Utilization |
|---|
| Source: Chempricehub |
This period saw a decline in PA supply, with reduced operating rates in both o-xylene and naphthalene process sectors, leading to lower overall industry output and capacity utilization. Import volumes are negligible; therefore, weekly total supply assessments no longer include imports, focusing solely on domestic production. Regarding downstream consumption, usage of DOP (Dioctyl Phthalate) and DBP (Dibutyl Phthalate) declined, while UPR (Unsaturated Polyester Resin) consumption and exports increased. Overall consumption is assessed as growing. Although supply still exceeds demand, the surplus narrowed compared to last week. The supply-demand balance aligned with previous expectations, providing some support to the market, with downstream acceptance of higher PA prices remaining robust.
Looking ahead, the supply side is expected to tighten further as more companies undergo maintenance than previously anticipated for recovery. Theoretical supply remains below demand growth projections, maintaining a supply deficit scenario relative to prior weeks, which supports prices. Key drivers include:
Comments
0