Phthalic Anhydride Market to Reach USD 6.02 Billion by 2032 Driven by Demand for Lightweight Composites

The Phthalic Anhydride Market is witnessing steady expansion, reaching a projected value of USD 6.02 billion by 2032, up from USD 4.39 billion in 2024, growing at a CAGR of 4.06% between 2025 and 2032. The market’s growth is driven by the increasing use of unsaturated polyester resins (UPR) in wind energy, construction, and marine sectors, as well as rising demand for phthalate plasticizers in automotive and consumer goods industries.

Technological advances in O-xylene catalytic oxidation and naphthalene oxidation processes are optimizing feedstock efficiency, while major producers such as BASF, UPC Technology, and Thirumalai Chemicals focus on lowering emissions and enhancing production flexibility. These innovations align with global sustainability trends and the transition toward greener manufacturing systems.

In the U.S., the chemical sector’s contribution—accounting for nearly 25% of GDP and employing over 500,000 workers—strengthens market stability. Domestic consumption exceeding 300,000 tonnes highlights growing demand and ongoing investments in advanced production lines.

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Market Dynamics

Growth Drivers

1. Rising automotive demand for lightweight materials

The phthalic anhydride market benefits from increased use of phthalate plasticizers in automotive dashboards, trims, and coatings. These materials play a crucial role in reducing vehicle weight and improving fuel efficiency, aligning with global sustainability and emission goals. The Department of Energy’s push for lightweight designs supports consistent market demand from OEMs and component suppliers.

2. Technological shift toward naphthalene oxidation process

Producers in Asia and Eastern Europe, such as DEZA a.s., are investing in hybrid and naphthalene oxidation processes that improve raw material flexibility and reduce dependency on oil-derived ortho-xylene. This approach balances supply risks and strengthens regional production stability, ensuring cost-efficient phthalic anhydride output.

Market Restraints

Despite strong demand, the phthalic anhydride market faces challenges due to stricter environmental regulations, particularly in the U.S. and Europe. Upgrading emission control systems and meeting compliance requirements have increased operational costs for legacy plants. This has led to slower capacity expansion, particularly among smaller producers struggling to meet the high investment threshold for modernization.

Segmentation Analysis

By Technology:

The naphthalene process dominated the market with an 82.30% share in 2024, due to its raw material availability and cost stability. European producers such as DEZA have expanded hybrid lines to balance naphthalene and ortho-xylene use. Meanwhile, the orthoxylene process is forecast to grow at 4.27% CAGR, supported by catalyst advancements and sustainable refining outputs in Japan and the U.S.

By Form:

The molten segment held 68.70% of the market in 2024, favored for its efficiency in bulk transport and use in continuous production lines by companies like IG Petrochemicals. Conversely, the flake form is expected to grow at 4.14% CAGR, driven by storage flexibility and ease of transport for specialty applications.

By Application:

Phthalate plasticizers accounted for 52.40% of market share in 2024, primarily driven by PVC applications in construction and automotive sectors. However, unsaturated polyester resins (UPRs) are projected to expand at a 4.51% CAGR, propelled by demand in marine, wind, and composite manufacturing sectors.

By End-use:

The automotive sector led with a 39.20% share in 2024 due to steady resin demand for interior and coating components. Meanwhile, electrical and electronics applications are forecast to grow fastest at a 5.06% CAGR, fueled by heat-resistant and flame-retardant resin requirements in modern electronics manufacturing.

Regional Insights

Asia Pacific dominates the phthalic anhydride market with over 56.50% share and the highest growth rate of 4.19% CAGR through 2032. The region’s demand is led by China, India, and Japan—driven by rising investments in automotive, construction, and renewable energy. China’s robust resin production capacity and India’s modernization initiatives at Thirumalai Chemicals strengthen the region’s leadership.

Europe follows with a 19.30% market share, supported by modernization of naphthalene oxidation facilities and increased UPR use in wind energy. Germany remains a central hub for composite resin production, with DEZA’s hybrid technology enhancing efficiency and emission control.

North America holds a 16.30% share, led by the U.S., which commands 78% of the regional market. Stable consumption of flexible PVC in construction and automotive interiors supports long-term demand, while local producers focus on specialty resins and sustainable production to maintain competitiveness.

Competitive Landscape

Prominent companies operating in the phthalic anhydride market include BASF SE, ExxonMobil Corporation, Mitsubishi Gas Chemical Company, Inc., I.G. Petrochemicals Ltd., Thirumalai Chemicals Ltd., Polynt S.p.A., UPC Technology Corporation, Stepan Company, Aekyung Chemical Co., Ltd., Nan Ya Plastics Corporation, LANXESS AG, Koppers Inc., Perstorp Holding AB, Proviron Holding NV, CEPSA, Uralkhimprom, DEZA a.s., C-Chem Co., Ltd., Jiangsu Sanmu Group Co., Ltd., and Anhui Tongling Chemical Industry Group Co., Ltd.

These companies are investing heavily in catalytic efficiency, emission control systems, and process hybridization to optimize output and sustainability. Partnerships across Asia and Europe aim to balance feedstock sourcing and strengthen regional supply chains.

Conclusion

The phthalic anhydride market is set for sustained growth, driven by innovations in catalytic processes, the rise of lightweight composites, and a strong push for sustainable chemical production. While environmental compliance remains a challenge, strategic investments by leading manufacturers continue to reinforce market resilience across automotive, construction, and renewable energy sectors.

Related Reports:

Unsaturated Polyester Resins Market

Automotive Lightweight Materials Market

Industrial Catalyst Market