Phthalic anhydride (PA) is produced in two grades: flake (white solid) or molten (clear liquid). It has a characteristic, irritating odour, is slightly soluble in hot water, hydrolysing to phthalic acid, and is soluble in alcohol and carbon disulfide. It reacts with strong oxidants and also reacts violently during heating with copper oxide or sodium nitrite, posing an explosion hazard.
The main plasticiser in which it is used is dioctyl phthalate (DOP), which goes into 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. The third largest outlet is PA-based alkyd resins, which are used in solvent-based coatings.
Principal end-markets for PA are the construction, marine and transportation industries, and architectural, machinery, furniture and fixture applications.
Small-volume uses for PA include dyes, pigments, detergents, herbicides, insecticides, fire retardants and saccharin.
PA is considered a mature market. The peak season typically runs March to June as construction activity and the housing market typically pick up in the spring. The start of 2014 showed an unusually strong level of demand, market sources reported, although they could not pinpoint the cause.
By February, demand settled back into its normal pace and remained largely steady. Buying activity picked up in July as buyers stocked up on material ahead of a significant increase in contract prices in August.
August has seen some slowdown in buying activity as a result of pre-buying and higher prices.
Buyers are also expected to stock up again before two producers go down for maintenance – one in mid-September and the other in October.
Meanwhile, the downstream plasticizer sector has been seen as largely stable and the downstream UPR sector has been seeing healthy demand.
A smaller outlet that typically sees strong demand on a continued basis is in science lab bench tops and laboratory hoods, according to market sources.
August PA contract prices rose 8.75 cents/lb ($193/tonne) from July on the back of that same increase in the feedstock orthoxylene (OX) contract in July. Monthly US PA contract prices typically settle on the delta of the previous month’s OX contract.
For August, PA molten is at 80.50-85.50 cents/lb free on board (FOB) and PA flake is at 81.50-88.50 cents/lb delivered (DEL).
Contract prices are expected to come back down in September because the OX contract for August was settled at a decline from the previous month.
PA was first made through the oxidation of naphthalene in concentrated sulphuric acid and in the presence of mercury sulphate. A catalytic vapour-phase oxidation of naphthalene later replaced this route. The latter process is done in air and in the presence of a vanadium oxide catalyst.
Today, naphthalene provides only about 16% of feedstock needs because OX has superseded naphthalene as the feedstock. In the US, all production of PA is from OX feedstock.
The process technology has changed little, although catalysts have a longer life of three years and yields have improved.
One developmental improvement was the lowering of the air-to-OX weight ratio to 9.5:1, allowing energy savings and reduced capital costs.
US PA producers include BASF, ExxonMobil, Stepan and Koppers Industries. Koppers is the only US producer that makes flake grade PA. Not many PA users in the US consume flake material; most use molten.
PA contract prices will be moving down in September even though buying activity is expected to stir back up as players stock up on material ahead of annual producer maintenance shutdowns.
Koppers is scheduled to shut down for maintenance in mid-September. Stepan is expected to go down in October.
PA pricing trends will continue to follow the price movement in OX contracts.
PA is also facing substitution with more environmentally friendly chemicals due to growing consumer awareness and a desire to move away from phthalates in consumer products.
Some PA users have reduced the amount of PA they buy because of this push for non-phthalate-based products.
Non-phthalate plasticizers, for example, have been developed by Eastman Chemical and BASF.
However, the substitution of PA with more environmentally friendly products is not expected to significantly impact the overall PA market for many years. PA is not expected to be fully phased out, market sources have said.