Slump in Demand and Low Operating Rates in Q1 Drag Down PBAT Prices in the European Market
- 03-May-2023 6:04 PM
- Journalist: Robert Hume
Germany- Polybutylene Adipate Terephthalate (PBAT) market dynamics witnessed a declining trend in the European market due to the weak demand outlook for the product from downstream (biodegradable packaging, cutlery, and more). In the first three months of 2023, PBAT producers and suppliers witnessed fewer inquiries about the product as the manufacturing units did not operate at full capacity, as the order volume was less when compared with the previous quarter's statistics. Towards the end of the first quarter of 2023, PBAT price ranged between USD 1901 to 2098 per MT, FOB Hamburg in the German market.
However, chronological sales were unchanged, with improvements in performance items and plastic packaging products balancing a fall in sales of more sustainable products and those for industry and infrastructure. Lower consumer demand weighed heavily on end-use manufacturers in the first quarter showcasing its direct impact on the overall market dynamics of PBAT in the European market. The suppliers and manufacturers had to cut down the profitability percentage.
PBAT market scenarios and the manufacturing industries were impacted by the weak consumer demand and biodegradable items producing units. Despite implementing and regulating rules against the consumption and production of non-biodegradable plastic material, PBAT demand remained under pressure. This is because of the presence of other alternatives to PBAT, and the leniency shown by the consumers against the product, proportionally impacting the overall market dynamics of PBAT in the European market.
Another major facet that governed the overall market prices of PBAT in the European market was the series of strikes that occurred in different countries of the European Union. Countries such as France, Spain, and Germany faced major participation of trade union members against the government. As a ripple effect, the country witnessed a low demand outlook accompanied by lower industrial production as the manufacturing divisions were short on on-field laborers to cater to the domestic and overseas demand outlook. As per ChemAnalyst, PBAT prices are anticipated to incline slightly in the upcoming quarter due to revived demand strength and a narrowed supply chain gap.