Naphthalene Prices Plunge Due to Falling Downstream Demand and Coal Tar Market Struggles

The Naphthalene price trend saw a slump in the week ending May 12, 2023, backed by the lowered downstream demand from the Phthalic Anhydride production and other household applications across Asian and North American markets. Moreover, a persistent fall in the upstream crude oil values in the USA and other Asian countries has significantly contributed to the final prices of Naphthalene this week.

The Naphthalene market in China has experienced a significant price decrease compared to the previous trading weeks. This decline has been primarily attributed to the reduced cost of raw Coal Tar, resulting in favorable conditions for coking enterprises. Despite a slight decline in the starting rate compared to pre-festival levels, the overall operating rate remains above 75%, indicating a generally stable operational environment. However, the downstream processing industry has continued to experience a deterioration following the holiday period, leading to a slight reduction in operating rates.

One of the key factors contributing to the downward trend of Naphthalene prices is the weakened market for Coal Tar. The decline in profit margin has prompted industry players to adopt a cautious approach, strongly inclined to keep the price of raw material tar in check.

In the USA, the Naphthalene price trend stagnated due to the lower demand from the downstream Phthalic Anhydride production and limited supplies from China in the second week of May 2023.

The current Naphthalene market dynamics stress the challenges faced by the Coal Tar industry across the globe and the downfall in downstream demand and profitability concerns. Market participants closely monitor market conditions and adopt strategies to navigate this period of decline, focusing on balancing costs and maintaining a stable supply chain.

As per the ChemAnalyst, it is anticipated that the Naphthalene prices will be affected by the sluggish downstream performance. Moreover, the overall supply of Coal Tar is anticipated to be relatively low, and the market will continue to operate weakly.