Phthalic Anhydride Market Report Scope & Overview:

The Phthalic Anhydride market size was valued at USD 4.39 billion in 2024 and is expected to reach USD 6.02 billion by 2032, growing at a CAGR of 4.06% over the forecast period of 2025-2032.

The phthalic anhydride market is driven by advances in O-xylene catalytic oxidation and higher demand for phthalate plasticizers, supported by BASF and UPC Technology’s efforts to lower emissions. Key manufacturers invest in digital monitoring, while U.S. chemical production contributes nearly 25% of GDP and employs over 500,000 workers, reinforcing industry stability. Growing use of unsaturated polyester resins (UPR) in wind energy, construction, and marine markets further strengthens demand.

U.S. import data show around 12,000 metric tonnes versus domestic consumption exceeding 300,000 tonnes, signaling shifts in the phthalic anhydride market share toward high-value applications. Rising focus on sustainability and lightweight composites fuels phthalic anhydride market growth, underpinned by innovations in the naphthalene oxidation process and steady demand across paints, automotive, and electrical sectors, as highlighted by recent industry and government reports.

Market Dynamics:

Drivers:

• Rising automotive lightweight materials applications support stable Phthalic Anhydride Market demand

Growing use of phthalate plasticizers in dashboards, trims, and underbody coatings aligns with the U.S. Department of Energy goals to reduce vehicle weight and improve fuel efficiency. The demand for automotive lightweight materials fuels investment in composite production, directly sustaining the Phthalic Anhydride Market. Increasing regulatory pressure for greener mobility solutions makes plasticizer-based compounds essential in high-performance, lower-weight designs, reinforcing stable consumption across domestic and export-focused automotive manufacturing clusters.

• Naphthalene oxidation process adoption improves feedstock flexibility in the regional Phthalic Anhydride Market

Producers in Eastern Europe and parts of Asia are revamping plants to use the naphthalene oxidation process; balancing feedstock risks tied to oil-derived Ortho xylene. For example, DEZA a.s. invested in hybrid production lines to optimize raw material choices. This flexibility helps protect margins and supports regional supply stability, making the Phthalic Anhydride Market Trends less vulnerable to single-feedstock price spikes, while aligning with customer needs for reliable and diversified sourcing strategies.

Restraints:

• Tighter environmental standards raise operating costs for legacy Phthalic Anhydride production facilities

Stricter air quality rules from the U.S. Environmental Protection Agency and European directives force producers to upgrade emission controls, which increases fixed costs. For the Phthalic Anhydride Market, older plants especially struggle to absorb these expenses without passing them downstream. As compliance costs rise, new investment decisions become harder, leading to slower capacity additions and potential regional supply tightness, especially where smaller plants cannot justify major retrofits in highly regulated markets.

Segmentation Analysis:

By Technology

Naphthalene process held a dominant phthalic anhydride market share of 82.30% in 2024 due to consistent regional raw material supply. Producers like Deza invested in hybrid lines, ensuring balanced use of coal tar–derived naphthalene, which remains abundant in Europe. European Chemical Industry Council notes this stabilizes production even when petrochemical feedstocks fluctuate. This process sustains large-scale plants supplying coatings and resin sectors, reinforcing its dominant share as mature markets value cost stability and robust capacity. Upgraded emission controls further improve environmental compliance without sacrificing output.

Orthoxylene (OX) process is the fastest growing with the highest CAGR of 4.27% during the forecast period over 2025 to 2032, driven by modern catalytic systems. C-Chem in Japan modernized OX plants to lower energy intensity, supporting greener chemical manufacturing goals. U.S. Energy Information Administration reports stable refining output, securing orthoxylene feedstock availability. Advanced catalysts shorten reaction times and improve yields, attracting Asian producers seeking scalable, lower-carbon solutions, especially in high-growth construction and electronics applications where process efficiency directly supports profitability.

By Form

Molten held a dominant phthalic anhydride market share of 68.70% in 2024 due to seamless bulk distribution to large resin plants. Producers like IG Petrochemicals supply molten product directly to major customers, eliminating re-melting costs and streamlining logistics. U.S. Department of Transportation data highlights pipeline and bulk shipping efficiencies, supporting molten’s adoption in continuous production environments. This cost-effective format is preferred by unsaturated polyester and plasticizer plants requiring uninterrupted feedstock, securing its position as the leading form in high-volume segments.

Flake form is the fastest growing with the highest CAGR of 4.14% during the forecast period over 2025 to 2032, driven by storage flexibility and regional trade. Eastern Europe’s DEZA expanded flake output for specialty resin and pigment makers needing manageable batch sizes. U.S. Census Bureau data shows rising demand for packaged chemicals in smaller markets. Flake’s solid state simplifies transport and inventory for mid-scale processors, enabling broader geographic reach and supporting growth across diversified manufacturing hubs.

By Application

Phthalate plasticizers held a dominant phthalic anhydride market share of 52.40% in 2024 due to critical role in flexible PVC. American Chemistry Council data shows steady PVC use in roofing, flooring, and automotive trims. Large-scale producers maintain cost efficiency, securing consistent supply to downstream converters. Despite scrutiny, flexible PVC remains irreplaceable in infrastructure and cable insulation, sustaining plasticizers’ dominant share. Strategic production capacity in Asia further supports export markets where demand remains strong.

Unsaturated polyester resins (UPRs) are the fastest growing with the highest CAGR of 4.51% during the forecast period over 2025 to 2032, driven by marine and wind composites. European Wind Energy Association highlights rising blade production, which relies heavily on UPRs for lightweight strength. BASF developed UPR systems targeting offshore turbines and boat hulls. Growing renewable energy and marine sectors boost resin demand, lifting phthalic anhydride use in composite parts critical to sustainable infrastructure projects.

By End-use

Automotive held a dominant phthalic anhydride market share of 39.20% in 2024 due to stable resin demand in interior and coating parts. Lanxess reports consistent demand for phthalate-based plasticizers in dashboards and trims, balancing cost and durability. U.S. Department of Transportation figures show steady vehicle output supports consumption, especially in protective coatings and underbody sealants. Strategic partnerships keep raw material supply aligned with OEM production cycles, maintaining automotive’s leading market position.

Electrical & electronics is the fastest growing with the highest CAGR of 5.06% during the forecast period over 2025 to 2032, driven by demand for heat-resistant resins. Stepan Company expanded capacity for specialty alkyd and polyester resins used in circuit boards and device housings. U.S. International Trade Commission data shows rising imports of electronic assemblies, boosting local resin demand. Flame retardancy and thermal stability make phthalic-based resins essential in modern electronics, accelerating segment growth.

Regional Analysis

Asia Pacific is the dominating and fastest-growing region in the forecast period, with a significant phthalic anhydride market share and the highest CAGR of 56.50% and 4.19% respectively, led by high demand for automotive lightweight materials. China remains the largest contributor, supported by the China Petroleum and Chemical Industry Federation’s data on resin capacity. India’s Thirumalai Chemicals and Japan’s C-Chem invest in modern O-xylene catalytic oxidation to reduce energy use. Regional investment in construction and electronics drives the fastest growth, supported by rising consumer goods production.

The Europe region is the second dominating with a significant phthalic anhydride market share of 19.30%, driven by the modernization of legacy naphthalene oxidation process plants. Germany dominates through strong unsaturated polyester resin demand in wind energy, supported by European Wind Energy Association data. Eastern Europe’s DEZA invests in hybrid production, improving flexibility and reducing emissions. Western European producers also invest in advanced systems to align with stricter EU environmental directives, stabilizing Europe’s position as the second-largest consuming region.

The North America region is the third dominating in the phthalic anhydride market with a significant market share of 16.30%, supported by steady demand in phthalate plasticizers for construction PVC. The US leads the region, holding a market share of about 78% and a market size of USD 559.73 million, and is projected to reach a value of USD 763.20 million by 2032, with the American Chemistry Council highlighting stable flexible vinyl use across housing and automotive interiors. Canada’s focus on specialty alkyd resins for coatings and Mexico’s rising automotive output sustain balanced demand. Strategic investment by local producers ensures reliable feedstock sourcing, reinforcing North America’s established market position.

Key Players:

The major phthalic anhydride market competitors include BASF SE, ExxonMobil Corporation, Mitsubishi Gas Chemical Company, Inc., I.G. Petrochemicals Ltd., Thirumalai Chemicals Ltd., Polynt S.p.A., UPC Technology Corporation (UPC Group), Stepan Company, Aekyung Chemical Co., Ltd., Nan Ya Plastics Corporation, LANXESS AG, Koppers Inc., Perstorp Holding AB, Proviron Holding NV, CEPSA (Compañía Española de Petróleos, S.A.U.), Uralkhimprom, DEZA a.s., C-Chem Co., Ltd., Jiangsu Sanmu Group Co., Ltd., and Anhui Tongling Chemical Industry Group Co., Ltd.

Recent Developments:

• In August 2024, BASF and UPC Technology signed an MoU to collaborate on supplying plasticizer alcohols and catalysts for phthalic anhydride, targeting reduced carbon emissions and regional capacity optimization

• In March 2024Mitsubishi Gas Chemical declared it will cease orthoxylene and phthalic anhydride production at its Mizushima Plant by mid-January 2025