In the third week of July 2025, U.S. naphthalene supply remained tight due to reduced European coke by-product output, especially from Spain, a key exporter. Slight declines in Spain’s crude steel production limited additional coal tar generation, impacting naphthalene availability. Despite muted demand from the plasticizer and construction sectors, inventory drawdowns and longer lead times highlighted constrained market conditions. Plasticizer demand remained soft, with below-capacity operations in DOP production, while construction activity offered seasonal but limited support through SNF applications. Market sentiment was neutral, with buyers closely monitoring European steel and coke trends for future supply cues. Overall, steady domestic production and moderate imports helped maintain supply balance amid subdued consumption.
The Naphthalene prices were up by 1.4% in third week of July 2025. The price trend was fuelled by reduced availability of Naphthalene in the market due to which there was minor supply shortage amidst dull and sluggish downstream demand from plasticizer and construction industries.
In the third week of July 2025, supply in the USA remained tight, prompted by lower European coking by-product production and fluctuating import levels. Spain, a large exporter to America of naphthalene produced from coal-tar, experienced a slight month-on-month fall in crude steel production to 1.1 million tons in June. Because naphthalene is derived from coal tar, a by-product of steelmaking coke oven, any change in crude steel production would directly impact the supply of naphthalene. While Spain grew year-over-year steel production by 16%, the marginal decline from May tempered additional coke oven capacity use, surpassing naphthalene supply growth. Meanwhile, Spain's domestic steel market recorded a rebar price recovery, possibly stimulating higher near-term coke use, though export impacts were dampened.
Since the U.S. is importing a small portion of industrial-strength naphthalene from Spain, low European production and no appreciable increase in coke production carried over into firm but tight U.S. availability of naphthalene during mid-July. As a result, U.S. import-reliant consumers had longer lead times, and inventory drawdowns were modest, yet sufficient to prevent actual shortages. Market sentiment remained cautious, with purchasers keeping a close eye for indication of increased coal tar production within the coming weeks from European steel direction. Through 11th July 2025, use in the U.S. plasticizer market was firm but not robust, tracking level production levels of its key downstream derivative, phthalic anhydride (PA).
Despite some mid-year restocking in PA consumption in inventory, softer downstream plasticizer production, particularly dioctyl phthalate (DOP), held back naphthalene draw. Most plasticizer producers operated below capacity due to sluggish automotive and flexible packaging demand, which equated to moderate feedstock demand. In the building and construction sector, naphthalene-grade plasticizer demand (especially sulfonated naphthalene formaldehyde, SNF) for applications in concrete additives showed seasonal strength, given ongoing infrastructure and repair activities.
U.S. naphthalene prices are expected to stay steady or rangebound in upcoming weeks, as per the ChemAnalyst database. Supply-side balance is maintained, with stable domestic production via coal-tar distillation and stable import levels from Spain, despite moderate European steel production curtailments. Demand-side factors on the other hand are subdued, with level phthalic anhydride production constraining consumption, while construction offers mild support by way of seasonal demand for superplasticizers. Sentiment in the market is neutral, with no prospective near-term supply shocks or demand spikes in the pipeline, although any increase in infrastructure activity or European tightening of supplies would put mild upward pressure on prices.
