Extending Supply Constraints, Phthalic Anhydride Price Maintains Firmness in Europe
- Journalist: Robert Hume
Phthalic Anhydride (PA) prices continue their rise in the European market even in May as the regional supply remains persistently tight. Prices have maintained an uptrend in Europe since the beginning of this year with major supply-chain disruptions that began in late Feb. still continuing to impact assessments.
Limited availability of upstream ortho-xylene (OX) and naphthalene has also impacted the production rates for PA. Extreme cold weather in February till early April restricted the supply of the raw materials, hence hampering the overall production of Phthalic Anhydride.
The demand for PA in Asia remained high from the downstream plasticizers, polyester resins, and alkyd paints manufacturers which reduced its ability to the export markets such as Europe. Another critical factor that limited the availability of Asian imports remained resolutely high cost of shipping and unavailability of containers. In addition, active purchases were observed by North America, specifically USA which still reels under the aftereffects of the polar storm as it continues to build stocks to cover the pick-up in domestic demand and secure inventories for the upcoming hurricane season.
Earlier in Q1, Europe PA industry witnessed major production issues as a key European producer remained shut for more than two months for maintenance while another producer reported prolonged outage. The demand for PA has been healthy as the construction and manufacturing sector keep consumption levels high. Demand is further bolstered by active restocking by the buyers who are insistently securing the material fearing shortage of PA in the coming weeks.
Spot price of Phthalic Anhydride (liquid) after the 3rd week of May was assessed at USD 1480 per MT on FD basis in North Western Europe.
As per ChemAnalyst, the demand for PA in Europe is likely to remain high as the European paints and coatings season will peak towards the end of Q2 and early Q3. Supply fundamentals are expected to improve further, amid a catalyst change at a major producer in April who had earlier slowed its PA production.
Phthalic Anhydride is a white crystalline organic chemical compound, partially soluble in hot water and completely soluble in carbon disulphide and alcohol. For commercial usage, Phthalic Anhydride is of the purity range between 99.8-99.9% and is available as flakes as well as in molten form. It is mainly utilized for producing unsaturated polyester resins, phthalate plasticizers and alkyd resins. Major end-user industries of Phthalic Anhydride include machinery, construction, marine, transportation, dyes and pigments etc.