European PTA Prices Surge Due to Supply Challenges and Rising Feedstock Costs

The European market has closed Purified Terephthalic Acid (PTA) prices with an increase for the week concluding on 15th September 2023. This price surge can be attributed to several key factors, as revealed by an anonymous European industry source. Firstly, persistent product scarcity within the European region has played a pivotal role in driving up PTA prices. Additionally, rising values of the essential feedstock, Monoethylene Glycol (MEG), have further contributed to this price escalation.

As of the latest assessment, Spot FD Northwest Europe PTA prices have stabilized in the European market following the initial increase during the third week of August 2023. This stability reflects the current market dynamics and the growing demand for PTA within the European region.

Furthermore, the feedstock for PTA production, Paraxylene, has experienced a notable price increase, and the week also witnessed a significant rebound in crude oil prices, with a nearly 4.5% increase. This uptick in crude oil prices has had a cascading effect throughout the entire value chain of the PTA market, influencing production costs and contributing to the rise in PTA prices. Equally significant is the upward trajectory of feedstock MEG prices. USD 10/MT also increased MEG prices in the FD Northwest Europe market. This rise in MEG prices has played a pivotal role in driving the overall PTA prices.

There was moderate demand from downstream industries, particularly the Polyester sector, which showed enthusiasm for procuring the feedstock. However, the Polyethylene Terephthalate (PET) Bottle industry experienced limited orders due to the subdued summer season and prevailing macroeconomic conditions.

Additionally, the consumer price index showed a notable rise from July 2023 to August 2023, settling at 2.4, up from the previous month's figure of 1.7. This increase indicates mounting inflationary pressures, which continued to impact consumer prices. On a positive note, there was an improvement in manufacturing activity in the region, as reflected by the Purchasing Managers' Index (PMI) reaching 43.5 in August 2023. Although this figure remains below the threshold, indicating expansion, it signifies positive momentum in the manufacturing sector.

In conclusion, the recent surge in PTA prices in the European market can be primarily attributed to persistently limited product availability and the upward movement in feedstock prices, particularly MEG and Paraxylene. These market dynamics have led to a substantial week-on-week increase in PTA prices, affecting industries dependent on this essential chemical component. Considering these factors and the market situation, ChemAnalyst forecasts that PTA prices may remain robust in the European market, especially as crude oil prices are anticipated to rise, further tightening the entire value chain of the PTA market.