Updated to mid-November 2009
Asian market review by Cheong Su Yeen, ICIS pricing
Softer mood in the feedstock orthoxylene (OX) coupled with lacklustre downstream dioctyl phthalate (DOP) sector exerted downward pressure on Asian phthalic anhydride (PA) prices.
Trading activity in the month of September remained lacklustre as market participants in the key China market were sidelined approaching the week-long National Day holidays. In the southeast Asian (SE Asia) region, derivative production was shut or running at reduced levels due to the Muslim fasting month of Ramadan.
In October, despite escalating energy values and rising OX spot prices, buyers refused to pay higher levels for PA cargoes. However, prevailing firm OX values coupled with low inventories bolstered demand in China. Sellers raised offers, in a bid to recover lost in production margins.
PA prices were assessed at $970-990/tonne CFR (cost and freight) CMP (China Main Port) and $990-1,020/tonne CFR SE Asia on the week ended 13 November.
European market review by Mark Victory, ICIS pricing
The end of the peak season of demand saw European PA liquid contract prices fall by €50-70/tonne from August to November.
Flake contracts remained broadly flat because of tighter supply in the proportionately smaller market, resulting from production outages.
Producers and buyers were expecting consumption to fall further throughout the fourth quarter as end-use consumers lowered inventories ahead of the year-end.
US market review by Ryan Hickman, ICIS pricing
Pricing news in the US phthalic anhydride market from mid-August to mid-November was highlighted by attempted manufacturing increases.
A pair of producers attempted 3 cents/lb ($66/tonne) hikes in their fees assessed on top of OX contract prices, but a lack of support from the rest of the market killed the increase.
Poor downstream demand kept price movement all determinant on supply costs as OX contracts fell by 2.50 cents/lb in October and jumped by 4.50 cents/lb in November. The monthly price differentials would be assessed on November and December PA prices.
Planned turnarounds from all major US phthalic anhydride producers in the third quarter could have put the market into a supply bind, but weak demand and few snags in maintenance kept supply steady.
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Phthalic anhydride
Uses and Outlook
The major outlet for phthalic anhydride (PA), accounting for just over half of production, is in the manufacture of phthalate plasticisers, the main product being dioctyl phthalate (DOP) which is used as a plasticiser in polyvinyl chloride (PVC). Hence, the consumption of PA is mainly dependent on the growth of flexible PVC, which is sensitive to general economic conditions as it consumed in the construction and automobile industries. Health and environmental issues that surround phthalates used in plasticisers for PVC could also hinder future growth prospects.
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Phthalic anhydride
Process Technologies
Phthalic anhydride was first produced by the oxidation of naphthalene in concentrated sulphuric acid in the presence of mercury sulphate. This route was later replaced by the catalytic vapour phase oxidation of naphthalene in air in the presence of a vanadium oxide catalyst.
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