Collapse of Cost Support for Naphthalene-Based Phthalic Anhydride Drives Market Decline (Sept 18–24, 2026)

1. Key Market Focus This Week

   1. The cost support for the naphthalene-based phthalic anhydride (PA) industry collapsed, leading to a sharp decline in market prices.

   2. With holidays approaching, early inventory clearance by the PA industry has become the dominant factor, creating a wait-and-see atmosphere in the market.

   3. The price gap between ortho-xylene-based and naphthalene-based PA supplies widened, improving transaction volumes for low-priced naphthalene-based PA.

2. Weekly Market Analysis

Specifically, during this period, the market price of Jiangsu ortho-xylene-based PA declined, with a fluctuation range of 9,800–10,250 RMB/ton; the market price of Hebei naphthalene-based PA also fell, ranging from 8,500–9,350 RMB/ton. Overall domestic PA prices dropped, with cost-side factors being the primary driver of the downturn. At the beginning of the week, expectations of easing tensions in the Middle East led to lower crude oil prices, weakening cost support from the upstream aromatics supply chain and exacerbating the wait-and-see sentiment, resulting in a gradual downward trend. However, anticipated maintenance shutdowns in the naphthalene-based PA sector caused industrial naphthalene prices to drop significantly. This collapse in cost support for the naphthalene-based PA industry, combined with the dominance of pre-holiday inventory clearance, triggered a plunge in domestic naphthalene-based PA prices. Nevertheless, the widening price gap between ortho-xylene-based and naphthalene-based PA stimulated improved trading at low levels for naphthalene-based PA, while the ortho-xylene-based PA market continued its weak downward trajectory.

3. Analysis of Market Influencing Factors

   1. Price trends of raw material industrial naphthalene.

   2. Widening price gap between ortho-xylene-based and naphthalene-based PA supplies.

4. Next Week's Market Forecast

It is expected that the supply-demand gap for PA production and sales may widen in the next period. Given the significant price difference between ortho-xylene-based and naphthalene-based PA, along with expectations of pre-holiday inventory clearance, the center of gravity for domestic PA market prices is projected to weaken. Key points to watch:

1. Supply Side: Overall operating rates in the PA industry are expected to decline next week. However, supply pressure remains high for the ortho-xylene-based PA industry in South China, facing continued pressure to clear inventories.

2. Demand Side: Operating rates among major downstream plasticizer producers remain low, with expected declines in UPR (unsaturated polyester resin) industry utilization. Consequently, overall consumption is forecasted to decrease.

3. Cost Side: Cost conditions for ortho-xylene-based PA are expected to remain stable, but tight o-xylene supply maintains strong cost support for this segment. Conversely, industrial naphthalene prices are expected to weaken, leading to reduced cost support for the naphthalene-based PA industry.

For more weekly market analysis, please refer to the Chempricehub Phthalic Anhydride Weekly Report.