Phthalic Anhydride to Be in Short Demand
                           By Xin Hua
According to projection, the start of production of several 20 000  t/a
units will bring the total capacity of phthalic anhydride to  688  000
t/a in 2000, 88 000 t/a being the naphthalene process and 600 000  t/a
being the o- phthalic  acid  process.   Even  if  the  output  by  the
naphthalene process is still 30 000 tons  and  the  output  by  the  o
-phthalic acid process (based on an operating rate of 80%) is  480  000
tons, the total output being 510 000 tons, the surplus will be 110 000
tons when the consumption is increased by 400 000 tons.
The main reason for the slackness of the phthalic anhydride  market  is
the soft market of DBP and DOP. The consumption of phthalic  anhydride
in the production of DBP and DOP almost accounts for  a  half  of  the
total. China imported 160 000 tons of DBP and DOP (270 000 tons of DBP
and 133 000 tons of DOP) last year, making things more  difficult  for
the phthalic anhydride market. The recent  slackness  in  the  coating
market has also led to a reduction  in  the  consumption  of  phthalic
anhydride. Besides, more phthalic anhydride units have been  completed
in the recent years. The production of phthalic  anhydride  was  quite
profitable from the second half of 1994 to the first quarter of  1997.
The highest price reached 17 000 yuan per ton in the first half of 1995.
Many enterprises put up phthalic anhydride units in pursuit of profits.
Phthalic anhydride is imported  in  the  form  of  processing  supplied
materials (tax exemption), small volume trade (half tax exemption) and
full volume trade.  Some  of  the  processed  products  from  phthalic
anhydride imported in the form of processing supplied  materials  are,
however, not exported but sold  in  the  domestic  market,   impacting
adversely the domestic phthalic anhydride market.
China imports phthalic anhydride from Korea, Japan,  Russia  and  other
European countries. Phthalic anhydride units in  these  countries  are
large-sized and their products are competitive  both  in  quality  and
  price.   Especially  due  to  depreciation  of  local  currencies  in
surrounding countries caused by the financial crisis from  the  second
half of last year, phthalic anhydride suppliers have sold the  product
to China at a reduced price, and the domestic market is affected  even
more seriously.