What is Phthalic Anhydride
Analysts Sentiment
Bullish
22.7%
Neutral
23.0%
Bearish
54.3%
What's driving sentiment this week:
Past Week (2026-05-31 to 2026-06-06) — Sentiment: Bearish
East China phthalic anhydride prices remained stable but weak by early June, with spot quotes between 8,500 and 8,800 RMB/mt on June 5 indicating minor upward price movement amid stable supply.
Demand-side signals were muted with no significant indications of increased consumption or order flows during the week ending June 6.
US crude oil inventories sharply declined by nearly 8 million barrels in the week ending May 29 and remained tight through June 3, pushing up energy feedstock costs for o-xylene production and pressuring phthalic anhydride margins downward.
This Week (2026-06-07 to 2026-06-13) — Outlook: Bearish
Phthalic anhydride margins face downside pressure this week due to sustained tight crude oil inventories elevating energy input costs globally.
The key event is the EIA Short-Term Energy Outlook release scheduled June 9, which could signal further crude price volatility and energy cost trends.
A significant drop in Brent crude prices or improved crude oil inventory levels would mitigate feedstock cost pressure and could flip the outlook toward neutral or bullish.
Key Market Impact
The dominant force currently driving phthalic anhydride prices and margins is higher energy feedstock costs resulting from tight US crude oil inventories.
Producers are likely to pass through higher costs where possible, while buyers may delay purchases anticipating margin squeezes and price volatility.
How About the Price?
Price Trajectory 2020–2026 (Brief Recap)
Phase 1 — Gradual Decline (2020–2024): Prices steadily decreased from $1190/ton in January 2020 to $900/ton in June 2024 with no specific influence events recorded during this period.
Phase 2 — Capacity Expansion Impact (Oct 2024): Following Aekyung Petrochemical's capacity expansion of approximately 30,000 tons per year in October 2024, prices continued their decline from $895/ton in July 2024 to $870/ton in December 2024, reflecting increased supply pressure.
Phase 3 — Persistent Oversupply and Price Drop (2025): Phthalic anhydride prices fell further to $830.61/ton in August 2025 amid reported persistent oversupply, with average operating rates dropping to 50-75% despite niche demand growth in electric vehicle wiring and wind turbine composites.
Phase 4 — Continued Capacity Additions and Price Pressure (2026): Asia-Pacific producers added over 300,000 tons capacity through 2024–2025 including IG Petrochemicals and Aekyung's expansions, intensifying supply competition; prices remained under pressure with reported FOB spot prices in China at $1173.90/MT in April 2026 despite this capacity increase.
Supply-side factors
- Capacity expansion by Aekyung Petrochemical at Ulsan complex, approx. 30,000 tons/year (Oct 2024)
- Asia-Pacific new capacity additions exceeding 300,000 tons in 2024–2025 (including IG Petrochemicals 80,000 tons and Aekyung's 50,000 tons)
- Increased supply availability intensifying global price competition (2026)
Demand-side factors
- Growing PVC plasticizer demand in Southeast Asia targeted by capacity increases (post-Oct 2024)
- Niche demand growth from electric vehicle wiring composites (2025)
- Niche demand growth from wind turbine composites (2025)
- Persistent oversupply despite rising specialty demand led to lower average operating rates (50-75%) in China (2025)
Substitutes & Alternatives
| Substitute / Alternative | Replacement Scenario / How It Substitutes |
|---|---|
| Isophthalic Acid (IPA) | Used in place of PA in unsaturated polyester resins and alkyd resins where improved flexibility, corrosion resistance, and weatherability are required. Requires reformulation of resin recipes; not a drop-in replacement but widely used as a partial or full substitute in high-performance coatings and marine resins. |
| Trimellitic Anhydride (TMA) | Substitutes PA in the production of high-temperature-resistant plasticizers (trimellitate esters) for PVC applications requiring low volatility and heat stability above 150°C, such as automotive wire and cable insulation. Requires different esterification chemistry and is more expensive, so substitution is driven by performance requirements. |
| Maleic Anhydride (MA) | Can partially replace PA in certain unsaturated polyester resin formulations to increase reactivity and crosslink density. Typically used in combination with PA rather than as a full replacement; the ratio is adjusted to tune resin properties such as hardness and cure speed. |
| Adipic Acid | Replaces phthalate plasticizers (derived from PA) in flexible PVC formulations where regulatory restrictions on phthalates apply (e.g., toys, food contact, medical devices). Adipate esters (e.g., DEHA) offer good low-temperature flexibility. Requires reformulation of the PVC compound and may affect permanence and cost. |
| Terephthalic Acid (TPA) / Dimethyl Terephthalate (DMT) | Used instead of PA-based alkyd resins in certain polyester coatings and powder coatings where higher thermal and chemical resistance is needed. TPA-based polyesters are increasingly preferred in industrial coatings; substitution requires full reformulation of the resin system. |
| DINCH (Di-isononyl cyclohexane-1,2-dicarboxylate) | A non-phthalate plasticizer that replaces PA-derived phthalate esters (DINP, DEHP) in sensitive PVC applications such as toys, medical tubing, and food packaging, driven by regulatory pressure. It is a drop-in replacement in terms of processing but is significantly more expensive and has a different regulatory profile. |
| Citric Acid Esters (e.g., ATBC, TBC) | Bio-based non-phthalate plasticizers that substitute for PA-derived phthalates in food-contact PVC films, medical devices, and children's products. They are drop-in compatible in many flexible PVC formulations but offer lower plasticizing efficiency and higher cost compared to phthalate esters. |
Regulatory Status
| Region | Regulation / Policy Name | Issuing Authority | Year (enacted or latest revision) | Key Requirement / Threshold | Source |
|---|---|---|---|---|---|
| US | Draft Risk Evaluation for Phthalic Anhydride (TSCA) | U.S. Environmental Protection Agency (EPA) | 2026 | Unreasonable risk to workers and consumers from dermal and inhalation exposure (strong respiratory and dermal sensitizer) across 38 of 44 conditions of use; risk management actions to follow peer review | https://www.epa.gov/assessing-and-managing-chemicals-under-tsca/risk-evaluation-phthalic-anhydride |
| US | OSHA Permissible Exposure Limit (PEL) | Occupational Safety and Health Administration (OSHA) | 1989 (current) | 1 ppm (8-hour TWA); equivalent to 12 mg/m³ | https://www.osha.gov/chemicaldata/721 |
| EU | REACH Annex XVII (Restrictions) | European Chemicals Agency (ECHA) | ongoing (original 2005, concentrations applied) | 0.1% by weight phthalate plasticizers in toys and childcare articles | https://echa.europa.eu/regulations/reach/understanding-reach/reach-restriction-list |
| US | UN Number for Transport | UN Model Regulations / DOT / IMDG | 1970s (current) | UN 2214 (solid form, class 8, packing group III) | https://www.carlroth.com/medias/SDB-3544-IE-EN.pdf |
| US | NIOSH Recommended Exposure Limit (REL) | National Institute for Occupational Safety and Health (NIOSH) | current | 1 ppm (10-hour TWA) | https://www.osha.gov/chemicaldata/721 |
| India | Anti-Dumping Investigation on Phthalic Anhydride imports | Directorate General of Trade Remedies (DGTR), Ministry of Commerce & Industry | 2020 (ongoing) | Investigation into dumped imports from China PR, Indonesia, Korea RP and Thailand; final duties may be imposed | https://www.dgtr.gov.in/en/anti-dumping-cases/anti-dumping-investigation-concerning-imports-phthalic-anhydride-pan-originating |
| China | Ecology and Environment Law Code (new chemicals registration) | Ministry of Ecology and Environment (MEE) | 2026 (effective) | Environmental management registration required before manufacturing or importing new chemicals; prohibitions on unregistered substances | https://www.3eco.com/article/news-and-insights/china-drafts-ecology-and-environment-law-code-replaces-many-existing-laws/ |
| EU | REACH SVHC Candidate List (phthalates downstream of PA) | European Chemicals Agency (ECHA) | ongoing (updates 2025-2026) | DEHP, DBP, BBP, DIBP require authorization; concentration limits in Annex XVII | https://echa.europa.eu/candidate-list-table |
Key Influence Events
Phthalic anhydride (PA) is the organic compound with the formula C8H4O3, appearing as white flaky or needle-like crystals with a mild characteristic odor. It is the anhydride of phthalic acid and one of the most important industrial aromatic chemicals. Produced primarily by the catalytic vapor-phase oxidation of ortho-xylene (or, historically, naphthalene) over vanadium pentoxide catalysts, it serves as a key intermediate in the manufacture of plasticizers (especially phthalate esters such as DEHP and DINP), alkyd resins, unsaturated polyester resins, dyes, pigments, and pharmaceuticals. It melts at approximately 131°C and sublimes readily, requiring careful handling due to its irritant properties.
Top Countries Production Capacity
Production Process of Phthalic Anhydride
Phthalic anhydride (PA) is the organic compound with the formula C8H4O3, appearing as white flaky or needle-like crystals with a mild characteristic odor. It is the anhydride of phthalic acid and one of the most important industrial aromatic chemicals. Produced primarily by the catalytic vapor-phase oxidation of ortho-xylene (or, historically, naphthalene) over vanadium pentoxide catalysts, it serves as a key intermediate in the manufacture of plasticizers (especially phthalate esters such as DEHP and DINP), alkyd resins, unsaturated polyester resins, dyes, pigments, and pharmaceuticals. It melts at approximately 131°C and sublimes readily, requiring careful handling due to its irritant properties.
Specs & Grades
| Property | Typical Value / Range | Unit | Grade / Note |
|---|---|---|---|
| Purity (Phthalic Anhydride content) | ≥ 99.5 | wt% | Standard commercial grade |
| Purity (High-purity grade) | ≥ 99.8 | wt% | High-purity / plasticizer grade |
| Melting Point | 130.8 – 131.6 | °C | All grades |
| Crystallization Point | ≥ 130.5 | °C | Indicator of purity |
| Color (APHA / Hazen, molten) | ≤ 10 | APHA | Plasticizer / resin grade |
| Acidity (as phthalic acid) | ≤ 0.10 | wt% | Standard grade |
| Maleic Anhydride content | ≤ 0.05 | wt% | Standard grade |
| Ash content | ≤ 0.001 | wt% | All grades |
| Iron content | ≤ 1 | ppm | High-purity grade |
| Moisture | ≤ 0.05 | wt% | All grades |
| Molecular Weight | 148.12 | g/mol | — |
| Boiling Point | 295 | °C (at 1 atm) | — |
| Form (commercial) | Molten liquid, flakes, or prills | — | Depends on logistics |
Who are the Top Players?
| Company | Headquarters | Key Facilities |
|---|---|---|
| BASF SE | Ludwigshafen, Germany | Ludwigshafen, Germany |
| ExxonMobil Chemical Company | Irving, Texas, USA | Baton Rouge, Louisiana, USA |
| IG Petrochemicals Ltd. | Mumbai, India | Taloja, Maharashtra, India |
| Koppers Inc. | Pittsburgh, Pennsylvania, USA | Cicero, Illinois, USA |
| Lanxess AG | Cologne, Germany | Krefeld-Uerdingen, Germany |
| Mitsubishi Gas Chemical Company, Inc. | Tokyo, Japan | Mizushima, Japan |
| Nan Ya Plastics Corporation | Kaohsiung, Taiwan | Kaohsiung, Taiwan |
| Polynt S.p.A. | Scanzorosciate, Italy | Scanzorosciate, Italy |
| Shandong Hongxin Chemical Co., Ltd. | Zibo, Shandong, China | Zibo, Shandong, China |
| Stepan Company | Northfield, Illinois, USA | Elwood, Illinois, USA |
| Thirumalai Chemicals Ltd. | Chennai, India | Ranipet, Tamil Nadu, India, Dahej, Gujarat, India |
| UPC Technology Corporation | Taipei, Taiwan | Linyuan, Kaohsiung, Taiwan |
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