Mixed Trends in Phthalic Anhydride Markets: North America Faces Supply Chain Disruptions Amid Hurricanes, While Europe Maintains Stability

Texas, USA: The Phthalic Anhydride market in the North American and European regions is experiencing a mixed trend. In the North American market, the prices of Phthalic Anhydride are witnessing a slight incline in their trend affected by the demand from the downstream Plasticizers sector along with the supply chain disruptions due to the Atlantic Hurricanes resulting in the bullish market sentiments. However, the German Phthalic Anhydride market is maintaining a stable trend at a higher end due to the maintenance of the supply and demand equilibrium.

In the North American market, the Phthalic Anhydride market experienced a slight incline of 0.31%, settling at USD 1610/MT (FOB-Texas) during the week ending on July 26th. The ongoing Atlantic hurricane season has led to significant supply chain disruptions, shifting the market scenario from stable to upwards. These disruptions have impacted the availability of Phthalic Anhydride, particularly affecting the downstream plasticizers market, where existing inventory levels are insufficient to meet demand. As a result, market players have increased their ex-quotations to reflect the heightened demand and supply chain challenges. The situation was exacerbated by the aftermath of Hurricane Beryl, which caused extensive damage in the Caribbean and power outages in southeast Texas. Additionally, the National Hurricane Center is monitoring a new disturbance in the central Atlantic, potentially worsening supply chain issues. Furthermore, the production cost of Phthalic Anhydride has risen due to increased prices of the feedstock Naphthalene, contributing to the overall price hike of the commodity.

In Germany, the Phthalic Anhydride market is maintaining stability at a higher end of its trend, with demand from downstream plasticizer enterprises remaining robust. This increased demand is being satisfactorily met by existing inventory levels, allowing market players to maintain their quotations and avoid disruptions. While the feedstock market has seen a slight decline in ortho-xylene prices and stable prices for naphthalene, the production costs for Phthalic Anhydride have been impacted. However, this potential downward pressure on prices is being counterbalanced by the persistent demand from plasticizer enterprises, resulting in stable commodity prices. In the broader economic context, Germany's economy unexpectedly shrank in the second quarter, with the country's gross domestic product (GDP) falling by 0.1% compared to the first quarter, as reported by the Federal Statistics Office, Destatis. This contraction contrasts with analysts' expectations of 0.1% growth. Despite the economic slowdown, the Phthalic Anhydride market remains resilient, driven by consistent demand in the plasticizer sector. This scenario underscores the market's stability, even amid broader economic challenges, highlighting the strong interplay between supply chain dynamics and downstream demand in maintaining price equilibrium.

As per ChemAnalyst, the Phthalic Anhydride market is anticipated to experience an incline in its trend in the upcoming few weeks. The US market is expected to witness more hurricanes which might affect the market scenario of Phthalic Anhydride.