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Since the fourth quarter, the anhydride market has been hit by successive downturns; with the peak sales period of \"Golden September and Silver October\" failing to materialize, prices continued to fall. Currently, the price of phthalic anhydride is at 5,700 yuan per ton, hitting a new low in nearly 4 years. Faced with supply and demand imbalances that are difficult to resolve in the short term, industry experts generally believe that the low-level trend in the phthalic anhydride market will continue. Weak supply and missed expectations for peak seasons: Since the beginning of this year, the anhydride market has shown a continuous downward trend. The fact that peak seasons have not been robust while off-peak periods have become even weaker reflects the mismatch between supply and demand in this industry. The traditional peak season of \"Golden September and Silver October\" performed poorly. The market remained modest in September, with the price of phthalic anhydride in East China remaining within the range of 6,100 to 6,250 yuan, showing little fluctuation. In October, the market experienced a significant decline, with the price of phthalic anhydride falling below 5,900 yuan, reaching a new low since 2025; it was also more than 1,000 yuan lower than at the same time last year. Entering November, the phthalic anhydride market showed no signs of improvement, and a period of decline continued. Increasing supply is the key factor behind the sluggish market for phthalic anhydride. “Since the beginning of this year, Ai Jing (Ningbo)’s 50,000-ton-per-year phthalic anhydride plant operating on the ortho-process was put into operation, raising China’s production capacity for phthalic anhydride to 1.63 million tons per year – a 3% increase compared to 2024. Shanxi Sanqiang’s 50,000-ton-per-year and Weijiao Group’s 50,000-ton-per-year phthalic anhydride plants operating on the naphthalene-process were also brought online, pushing China’s production capacity for phthalic anhydride produced via this method to 1.72 million tons per year, an increase of 5.8% compared to 2024. The increased supply of phthalic anhydride has significantly weakened the bargaining power of manufacturers. To maintain cash flow and market share, manufacturers commonly choose to sell at reduced prices, which leads to a continuous decline in the price level of phthalic anhydride. ”Qian Fang, an analyst at JLCC, said that the decline in anhydride prices in the fourth quarter is expected to slow down as factories become more willing to hold their prices steady, but due to weak underlying fundamentals, there remains insufficient momentum for a market rebound. The reversal in profits and losses stems from differences in the upstream production processes. Phthalic anhydride is primarily divided into phthalic anhydride produced by the ortho-process and that produced by the naphtha-process, and in 2025 there was a significant reversal in their profitability levels. Wang Sheng, an analyst at Zhuochuang Information, said that previously, phthalic anhydride produced via the naphthalene route had strong profitability due to its cost advantages; although it experienced periodic losses starting in 2023, its profitability remained higher than that of phthalic anhydride produced via the ortho route. Entering 2025, this situation began to change quietly. Following the commissioning and resumption of operations of the second phase of the aromatic compounds unit in the Yulong Island refining and chemical integration project, as well as the aromatic compounds unit at Tianjin Petrochemical, the increased supply of o-xylene led to a drop in market prices. As a result, the cost pressure associated with o-phthalic anhydride decreased, shifting the operation from a loss of 300–500 yuan to a slight profit margin. In contrast, for naphthalene-based phthalic anhydride, it was still able to operate near the break-even point at the beginning of the year, but starting from the second quarter, rising cost pressures led to losses of over 900 yuan per unit. Although industrial naphthalene prices declined after the fourth quarter, profits from naphthalene-based phthalic anhydride improved to some extent, yet it was not possible to break through the break-even point; overall, the industry operated at a loss, with its capacity utilization rate dropping to low levels of 40%–50%. Industry experts generally believe that the divergence in the trends of raw materials will continue, and the changes in profitability for the two different production processes are unlikely to change. The anhydride industry is set to enter a period of deep adjustment; sustained low operation rates and the permanent withdrawal of some outdated production capacities may provide a slight opportunity for an improvement in profits, but it will take some time to completely reverse this difficult situation. Weak demand leads to the ‘shutdown’ of the production engine; the main end-use products of phthalic anhydride are plasticizers, unsaturated resins, etc. Since the beginning of this year, the terminal industry has recovered slowly; purchases of phthalic anhydride have mainly been in the form of small orders to meet basic needs, with no desire for large-scale inventory replenishment. The traditional expectation of a strong consumption season in \"Golden September and Silver October\" also failed to materialize, resulting in a severe setback to market confidence across various sectors. Dioctyl phthalate (DOP), the main plasticizer downstream of phthalic anhydride, is facing challenges such as an increasing number of alternatives and a declining demand from end-users. Under the pressure of environmental regulations and intensifying competition, the DOP market lacks vitality; overall production levels among companies are low, and DOP prices have dropped along with those of raw materials, continuing to reach new lows for the year. “Affected by the mismatch between supply and demand, players maintain a cautious attitude toward the DOP market, with purchases driven primarily by essential demand. Furthermore, the price of the raw material, octanol, is also on a downward trend, which makes it difficult to provide effective support for DOP; it is expected that sellers will continue to offer discounts when selling their products. ”Wang Chunming, general manager of Shandong Ruiyang Chemical Trade Co., Ltd., said. Another type of unsaturated resin derived from phthalic anhydride is also affected by an oversupply and insufficient demand; as a result, its price keeps falling, reaching new lows in recent years on several occasions. At the end of October, a new unsaturated resin plant was put into operation in Huanggang, Hubei, but its impact on supporting the upstream industry was limited. Currently, the operating rate of the unsaturated resin industry is around 36%. Industry experts generally believe that there is still room for decline in the unsaturated resin market; the industry’s operating capacity is unlikely to increase, and demand for raw materials will remain low, which makes it difficult to boost the phthalic anhydride market.