Global Phthalic Anhydride Prices Fail to Gain Momentum With Slow Market Purchases
- 27-Nov-2023 3:19 PM
- Journalist: Kim Chul Son
Louisiana, USA- Phthalic Anhydride prices are declining in the European and North American markets along with feedstocks, Naphthalene, and o-xylene. The bearishness has persisted in the past few weeks in the market, contributing to lackluster demand and ample supply from the downstream plasticizer and polyester resin enterprises. This sluggish market situation put the producers under pressure to reduce purchasing activities from the buyer's end, ultimately resulting in the production cut for Phthalic Anhydride along with slow market offtakes.
In the European market, Germany is showcasing a downward price correction for Phthalic Anhydride. Similarly, the upstream market of Phthalic Anhydride, Naphthalene, is following the upward price trend due to an increase in spot purchases while o-xylene moved in a Southward direction. An adequate inventory level in the storage facilities fulfilled the domestic market's demand without additional restocking. There has been a slight decline in the demand from the downstream Plasticizer and Polyester resin enterprises. The producers reduced the production rate so that the existing ones could be utilized first and the oversupplies of Phthalic Anhydride could be prevented. In terms of spread, the difference between Phthalic Anhydride and its feedstocks, Naphthalene and o-xylene was less, indicating the weak market situation for the commodity. Looking at the market situation of Phthalic Anhydride, the suppliers remain hesitant to raise their quotations and instead provide discounts on bulk purchases.
In the same manner, Phthalic Anhydride in the North American market is following a downward price trend. Feedstock, Naphthalene, and o-xylene supported the feeble price trend, as both of them are showcasing a decline in their prices. With the week ending on 24th Nov, the price of Phthalic Anhydride in the USA was USD 1405/ton FOB Louisiana. As per the trade data, the product's inventory level was elevated due to lower consumption from the downstream Plasticizers and Polyester resin market. Considering the bearishness in the market situation for the commodity, the traders were forced to decline their prices for Phthalic Anhydride so that the buyers could purchase their stocks. Otherwise, the significant manufacturing enterprises would face many more business losses. This situation was favorable for the buyers as they were able to purchase Phthalic Anhydride at discounted prices. Yet, they were cautiously purchasing the stocks as they already had enough of their storage facilities to be utilized first by the end user.
According to ChemAnalyst, the prices of Phthalic Anhydride are anticipated to increase in the European and North American markets in the forthcoming weeks. The expected growth in demand for Plasticizers and Polyester Resins from the domestic market may lead to an increase in the production rate along with trading activities. With the growing demand, rapid consumption of the inventory levels might be done by the end users, resulting in an increase in the prices of Phthalic Anhydride.