Crippling Demand Weakens Purified Terephthalic Acid (PTA) Market Value in China
- 18-Jul-2022 4:23 PM
- Journalist: Nina Jiang
Guangzhou, China: Considering the lowering market activity and declining feedstock market, Purified Terephthalic Acid (PTA) prices slumped in the Chinese market. Over the past three days, it has stabilized in its lowered prices, supported by the sporadic trade and weakening sales ratio. The market outlook for fresh materials remains dull, and the overseas demand has not changed significantly. In terms of its raw material, Paraxylene drove down in tandem with the downward trajectory in both crude oil prices and patchy demand for the product.
After the price drop for Purified Terephthalic Acid (PTA), downstream polyester makers were ecstatic. Additionally, supplies of purified terephthalic acid were still sufficient to meet consumer demand. Demand, however, weakened in the downstream sector as consumers were reluctant to purchase in such an unexpected demand outlook. At the same time, upstream Paraxylene has decreased in keeping with the dubious market of crude oil. Crude oil prices are currently quoted at USD 98.92/barrel as of 18th July 2022, reflecting a declining trend in the price of crude oil derivatives on the worldwide market. Several sources stated that the recent Paraxylene market was more influenced by sentiment than fundamentals and that the downstream Purified Terephthalic Acid market was to blame for the daily losses.
Meanwhile, Purified Terephthalic Acid (PTA) supply and demand were balanced in June. In July, some Purified Terephthalic Acid (PTA) units still have maintenance plans, such as Hengli and Fuhaichuang. In contrast, there is no restart plan for Sinopec Yangzi and Honggang units in China. Still, if the polyester production plant reduces its offtakes, the Purified Terephthalic Acid (PTA) market may face pressure from oversupply in the short term.
As Per ChemAnalyst, “The price for Purified Terephthalic Acid (PTA) is difficult to expect a substantial increase in terminal demand. The regional supply and demand mismatch may continue. Furthermore, the patchy demand outlook for Polyethylene Terephthalate (PET) bottles from the packaging sector and Polyester is expected to drive its market value even lower in the coming weeks.