The ICIS Phthalic anhydride reports will keep you informed and up-to-date with market movements in Asia, Europe and the US. Our network of locally-based reporters publish weekly price assessments for spot and contract, depending on the region.
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Updated to Q1 2019
Phthalic anhydride (PA) inventory was high among producers, creating downward pressure on prices. This contributed to the widening spread between upstream orthoxylene (OX) and PA. However, from February PA prices rose as the eroded margins from rising feedstock OX prices were no longer seen as sustainable. As such, offers rose and done deals also closed higher. Nearing the end of the quarter, supply tightened and prices started to rise.
Spot PA prices in both Asia and China started off the year weak, on the back of a downtrend in key downstream diocyl phthalate (DOP) and low operating rates for downstream unsaturated polyester resins (UPR). Buyers were also cautious about committing to cargoes amid volatility in upstream crude prices. Domestic demand in China particularly remained sluggish in the quarter. Demand in India, on the other hand, was strong at the end of the quarter.
The first quarter for phthalic anhydride (PA) was marked by restricted supply of raw material, with BP’s force majeure on its upstream orthoxylene (OX) plant in Gelsenkirchen, Germany, and reduced imports from Russia. European PA plants have been working at full capacity whenever possible until the end of March, when one producer started reducing its production levels because of the high prices on the OX spot market.
PA demand has shown a degree of resilience against the poorly performing automotive sector downstream and impacting macro-economic factors such as uncertainty over the outcome of Brexit or the US-China trade negotiations. Demand in the construction sector was deemed relatively robust in southern Europe, underpinning PA consumption upstream. PA is one of many petrochemical markets to see high levels of stock-piling ahead of Brexit.
Phthalic anhydride (PA) supply levels have held steady at a strong pace throughout the first quarter. While there was tightness in the upstream mixed xylenes (MX) market toward the end of the quarter as a result of refinery maintenance season, this appeared to have little impact on PA inventories. In addition, there were no production issues reported for PA, despite the disruption in raw material MX.
Demand for PA began somewhat lacklustre in early 2019, trending lower on seasonality. Following the holidays, PA demand rose to meet expected growth for the season, but has remained very steady since then. Refinery maintenance season squeezed supplies for upstream MX. Despite this tightness and associated rise in MX spot prices, PA supplies remained sufficient, with no effect on demand.
We offer the following regional Phthalic anhydride analysis and news coverage to keep you informed of factors and developments affecting prices in the Phthalic anhydride marketplace.
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Over half the production of phthalic anhydride is used in the manufacture of phthalate esters, employed as plasticisers in PVC. Other major uses are in polyester resins and (decreasingly) in alkyd resins.
Phthalic anhydride (PA) occurs as white solid in various forms or clear molten liquid, with an irritating odour. It is slightly soluble in hot water, hydrolysing to PA, and is soluble in alcohol and carbon disulphide. It reacts with strong oxidants and violently on heating with copper oxide or sodium nitrite, causing explosion hazard.
The major outlet for 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).
The second largest outlet is in unsaturated polyester resins (UPR) which are usually blended with glass fibres to produce fibreglass-reinforced plastics. Principal markets are construction, marine and transportation.
The third largest outlet is PA-based alkyd resins, which are used in solvent-based coatings for architectural, machinery, furniture and fixture applications.
Small volume uses for PA include the manufacture of dyes and pigments, detergents, herbicides and insecticides, fire retardants, saccharin and polyester resin cross-linking agents.