European and US Markets Grapple with Phthalic Anhydride Price Surge Amid Supply Disruptions

Cologne, Germany: During February 2024, Phthalic Anhydride witnessed an incline in its price trend in the North American and European regions, due to the disruption in the supply and demand equilibrium. The demand for Phthalic Anhydride from the downstream Plasticizers and Polyester resin enterprises increased but the inventory levels were insufficient to fulfill this rising demand. Therefore, the production rate was enhanced by the producers, and market players decided to increase their raise their quotations among the significant manufacturing units so that the gap between the supply and demand of Phthalic Anhydride could be fulfilled and the equilibrium could be maintained.

In the German Phthalic Anhydride market, the prices showcased an incline of 3.63% and reached USD 1312/MT (FCA-Cologne), during the end of February 2024. The prices experienced an incline as the demand for Phthalic Anhydride from the downstream Plasticizers and Polyester resin enterprises was not fulfilled by the inventory levels and due to the ongoing farmer’s protest, the trading activities were hampered, and the trades were delayed which indicates the supply disruption. Farmers are blocking the roads and are protesting against the green law since as per the law they are not getting fair prices for their production, the production cost is higher than the prices at which the crops are getting sold. Therefore, the angry farmers blocked the roads the inventories were not delivered on time and the demand from the downstream sectors was not fulfilled. Furthermore, due to the shortage of supplies of Phthalic Anhydride, the market players grabbed this opportunity and raised their ex-quotations to increase their marginal profits.

Similarly, during February 2024, in the US market, the prices for Phthalic Anhydride witnessed bullishness in the market with an incline of 7.59% due to the surge in the demand from the downstream Plasticizers and Polyester resin enterprises and the increased consumption rate of the existing inventory levels resulted in the insufficient stocks in the storage facilities. In terms of the feedstock market, the prices of o-xylene increased and supported the price trend of Phthalic Anhydride, however, Naphthalene prices experienced bearishness in the market, therefore, it can be said that the production cost for Phthalic Anhydride was balanced by both the feedstocks. In terms of the upstream market, Crude Oil prices also surged and resulted in the increased energy cost which contributed to the incline in the operating cost for Phthalic Anhydride. Regarding the spread, the difference between Phthalic Anhydride, Naphthalene, and o-xylene broadened and showcased the bullish market situation for the product.

However, the increasing environmental apprehensions and strict regulations have led to a rising demand for bio-based plasticizers, sourced from renewable materials like plant oils and bio-based chemicals. Companies are actively investing in research and development to create sustainable alternatives to conventional phthalate-based plasticizers, in line with their commitment to environmental goals. The need for specialty plasticizers designed for particular applications, including medical devices, food packaging, and automotive components, is experiencing a consistent increase. Ongoing advancements in chemical formulations are geared towards improving performance characteristics such as heat stability, low volatility, and compatibility with a range of polymers, addressing the diverse requirements of various industries.

According to ChemAnalyst, Phthalic Anhydride prices are forecasted to rise in the coming weeks, driven by anticipated heightened demand from downstream Plasticizers and Polyester resin manufacturers. Additionally, disruptions in Phthalic Anhydride supplies are expected to exacerbate the situation further.