Lead: The domestic phthalic anhydride (PA) market exhibits a divergence characterized by weak prices for ortho-xylene-based PA and strong prices for naphthalene-based PA. Supply shortages in naphthalene-based PA have intensified, driving its price upward. Consequently, the price gap between ortho- and naphthalene-based PA has narrowed, with naphthalene-based PA becoming the primary driver of market increases.
Specifically, during this period, the market price for Jiangsu-based ortho-xylene-derived PA remained stable, fluctuating within the range of 10,350–10,600 RMB/ton. In contrast, the market price for Hebei-based naphthalene-derived PA rose, fluctuating within the range of 9,400–9,600 RMB/ton. This period saw divergent trends in the domestic PA market: ortho-based PA prices oscillated at high levels, while naphthalene-based PA prices rebounded. Supply-side factors were the primary influence on the market. Due to persistently low operating rates in the domestic naphthalene-based PA industry, combined with continuously increasing capacity utilization in the key downstream plasticizer sector, supply tightness in the naphthalene-based PA market was exacerbated, driving rapid price increases. In the domestic ortho-based PA market, expectations of increased supply put pressure on high-end prices; however, the rise in naphthalene-based PA prices provided some support, leading to high-level oscillations.
Recently, the persistent wide price gap between ortho- and naphthalene-based PA led to partial substitution of ortho-based PA with naphthalene-based PA domestically. Inventory levels in the domestic naphthalene-based PA industry were generally oversold. Given its relatively lower price compared to ortho-based PA, naphthalene-based PA typically led price rebounds in each market cycle. However, this week, as supply shortages of northern naphthalene-based PA intensified, the naphthalene-based PA market staged a strong rebound while ortho-based PA prices remained stable, resulting in a narrowing of the price gap between the two.
| Figure 1: Domestic Phthalic Anhydride Price Trend Chart (Unit: RMB/ton) | Figure 2: Domestic East China Ortho-Based PA vs. Hebei Naphthalene-Based PA Price Spread Trend Chart (Unit: RMB/ton) |
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| Data Source: Chempricehub Information | Data Source: Chempricehub Information |
Recently, on one hand, insufficient supply of the raw material ortho-xylene has kept capacity utilization in the ortho-based PA industry at persistently low levels. On the other hand, concentrated maintenance shutdowns of naphthalene-based PA units have caused a continuous downward trend in capacity utilization within the domestic naphthalene-based PA industry, further exacerbating supply shortages. According to data monitoring by Chempricehub, the overall capacity utilization rate of the domestic PA industry stood at 54%, a slight increase of 2% month-on-month but a decrease of 8% year-on-year.
| Figure 3: Domestic Phthalic Anhydride Industry Capacity Utilization Rate Trend Chart |
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| Data Source: Chempricehub Information |
During this period, PA supply volume increased. Operating rates for both ortho-based and naphthalene-based PA industries rose, leading to an overall increase in industry output and capacity utilization. The proportion of imports is negligible; therefore, weekly total supply assessments no longer include import volumes and refer only to domestic PA production. Among downstream consumption, usage for Dioctyl Phthalate (DOP) and Dibutyl Phthalate (DBP) increased, while usage for Unsaturated Polyester Resin (UPR) and export volumes declined. Overall consumption was assessed as increasing, resulting in a supply-demand balance where supply fell short of demand (negative balance difference). The supply-demand balance within the period aligned with previous expectations. Supply-demand data provided certain support to the market, which, combined with tight supply in the naphthalene-based PA segment, drove the market price center higher. Looking ahead to the next period, supply recovery is expected to exceed projections due to fewer planned shutdowns than anticipated, suggesting growth on the supply side. Meanwhile, downstream unit expansions are expected on the consumption side. Theoretically, supply will exceed demand, with the absolute value of the supply-demand balance difference showing a growing trend, thereby exerting some downward pressure on prices.
It is projected that the supply-demand gap for phthalic anhydride may widen in the next period. Ortho-based PA prices are expected to remain generally stable, with some local markets seeing a potential rise in the price center. The tight spot supply situation for naphthalene-based PA is expected to continue, supporting a rebound in naphthalene-based PA prices. Key focus areas include:
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