Although the domestic prices of one of the downstream derivatives-Dioctyl Phthalate fell in China, the spot prices of Phthalic Anhydride remained strong. The rise in imported cargoes and the domestic market’s healthy buying and selling activities back the strong price trend.

China majorly imports Phthalic Anhydride from Taiwan. Since Taiwan's export was affected due to the global tension and China's lockdown, the suppliers have raised the cost of the imported cargoes to safeguard their profits. Therefore, the prices of Phthalic Anhydride increased further. One of the importers stated that disruption in the supply chains due to the pandemic had increased the price of raw materials O-Xylene and Naphthalene and their downstream derivatives, which also caused the price of Phthalic Anhydride to soar to $12 per tonne.

However, Dioctyl Phthalate, which is a derivative of Phthalic Anhydride, has been witnessing bearish market sentiments due to declining demand fundamentals. The domestic price trend of Dioctyl Phthalate has been traced downwards over the past few weeks. The resurgence of COVID since March 2022 and the lockdowns implemented have severely affected the downstream automotive and construction industries, ushering in reduced demand for Dioctyl Phthalate.

Despite the above-mentioned conditions, the Phthalic Anhydride market grew as the continuous rise in upstream crude has been affecting its derivatives, O-Xylene, which is used as the raw material in the production of Phthalic Anhydride. Also, due to the scarce availability of raw materials, the traders were provoked to revise their offers, resulting in the Phthalic Anhydride price rising. Moreover, the ease of restrictions in specific cities in China resulted in healthy production activities and an increased requirement for Phthalic Anhydride from the domestic market, which led to its market growth.

According to the ChemAnalyst, "The prices of Phthalic Anhydride might witness an upward trend in the coming weeks with rising demand from the downstream derivative sectors. The expected ease in the COVID cases might resume the activities of end use automotive and construction sectors, which might result in healthy demand for the product. Moreover, the rising fuel prices are likely to affect the freight charges."