Worsening Temperature and Container congestion pressurizes Global Phthalic Anhydride Market
- 23-Aug-2022 2:58 PM
- Journalist: Motoki Sasaki
Global Phthalic Anhydride prices are showcasing a downturn due to container congestion in China and the USA ports. The shutdown of certain manufacturing plants in China due to heat waves has also added fuel to the already worsening situation. Moreover, the declining trade activities in the US domestic markets also pull down the Phthalic Anhydride pricing.
China has been facing the worst heatwave in the past 60 years. The increase in temperature has resulted in the reducing water levels in the river, which led to low electricity production from the hydropower plants. Thus, the rising heat and depleting electricity have put pressure on the power grid, forcing the shutdown of all factories in Sichuan. Sichuan is the major manufacturing city in China that consumes colossal electricity, and the government has imposed shutting it down for one week to save power. In addition, the planned power cut and halted production disrupted the trade in Shanghai, pilling up products in the domestic market and negatively impacting the Phthalic Anhydride market.
The price of exported cargoes from the USA is depreciating due to the sluggish demand from the downstream paint, dyes, and chemical industries. However, the trucker's protest in the previous month hampered the trade activities in the Oakland port for one week, and the marine depots are still in the process of emptying the backlogs. Therefore, the port congestion and delay in exporting activities in the USA prompted the foreign buyers to seek supply from other exporters. Thus, the US traders were in a dilemma to decrease the prices. As a result, the cost of Phthalic Anhydride declined by approximately 1.7%, with a drop of $35 per tonne on 19th August.
According to the ChemAnalyst team analysis, the price of Phthalic Anhydride might increase in the coming weeks as the upstream Crude and feedstock Mixed Xylene prices may increase. Besides, the freight charges are likely to increase, further inflating the Phthalic Anhydride pricing. Furthermore, if the port congestion eases, the demand may incline from the regional and international markets, resulting in the upward price trend of Phthalic Anhydride.