Purified Terephthalic Acid Prices Dip in Europe Amidst Weak Downstream Demand
- 29-May-2023 6:33 PM
- Journalist: Emilia Jackson
The month of May saw a decline in the price for Purified Terephthalic Acid (PTA) in Europe due to low manufacturing costs and lower feedstock Paraxylene prices. Additionally, weak downstream demand from the packaging industry helped sustain the PTA market's downward trend.
The feedstock Paraxylene factories in China, with a total capacity of 7.67 million MT/Yr, will resume from the end of May to the end of June. As a result, Paraxylene output would increase, easing the supply to the European and Asian markets. However, a small decrease in PTA production costs and a still-weak demand prevented rises from being passed on to May transactions in the European market.
In terms of demand, the onset of the high season has so far failed to produce any noticeable improvements because of the cool weather, and the advent of less expensive import materials is also dampening consumer interest in making purchases. Producers sometimes reported having large inventories of finished goods that they struggled to sell due to weak demand. According to a buyer in the beverage industry, end-use demand is still less strong. Additionally, the high inflation rate in Germany and other European nations impacts the consumption of beverages because customers must be careful with their spending, thus reducing the demand for PTA from PET (Polyethylene Terephthalate) Bottle industries.
Meanwhile, Local suppliers in the PTA market kept their pricing largely low in May to clear up their inventories in light of lower-than-anticipated demand and declining production costs due to cheaper feedstock Paraxylene supply.
As per ChemAnalyst, PTA producers do not anticipate significant changes in the upcoming weeks due to the decreased demand from the packaging sectors and the adequate material supply. Players anticipate no noticeable changes in PTA prices due to more than balanced inventories, even though they hope to see increased buying activity in the event of warmer weather in the coming weeks.
