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Stable PBAT Prices Persist in USA despite Increased Seasonal Demand
Stable PBAT Prices Persist in USA despite Increased Seasonal Demand

Stable PBAT Prices Persist in USA despite Increased Seasonal Demand

  • 21-May-2024 3:13 PM
  • Journalist: Stella Fernandes

Los Angeles (USA): During the first week of May, the PBAT (Polybutylene Adipate Terephthalate) market in the USA experienced stable prices, with no significant changes observed. The price for PBAT stood at USD 1734 per metric ton, CFR Los Angeles. This stability indicates a balance between various market forces impacting both demand and supply.

Throughout the week of May 10th, the PBAT market maintained equilibrium despite entering the peak season for sectors that heavily consume PBAT, such as agriculture and packaging. The anticipated increase in demand for PBAT mulch films in agriculture, driven by the summer growing season, and the heightened production of PBAT-based food packaging, spurred by growing consumer preference for sustainable options, did not lead to a price increase. This stability can be attributed to a mix of supply and demand dynamics in the market.

On the supply side, the global PBAT market experienced a temporary supply shortage due to the surge in global demand and limited production capacity. Key raw materials for PBAT production, such as adipic acid and butanediol, saw price fluctuations, contributing to the overall market dynamics. Additionally, the USA's reliance on imports from countries like China, Vietnam, and Europe added complexity to the supply situation. Factors such as lower-than-usual PBAT inventory levels across the US supply chain and speculative buying in anticipation of future price hikes further influenced the market. Disruptions in imports due to logistical issues or trade policies also played a role in tightening the supply.

Despite these supply-side challenges, the demand for PBAT remained strong. In early May, the demand for PBAT in the USA entered its peak season. The agricultural sector increased its consumption of PBAT mulch films, preparing for the summer season. Concurrently, the production of PBAT-based food packaging rose in response to consumers' growing preference for sustainable options. Environmental concerns also fueled the demand for biodegradable plastics like PBAT across various sectors.

Broader economic indicators showed a more stable economic environment. The US Consumer Price Index (CPI) rose by 0.3% in April 2024, with an annual increase of 3.4% year-on-year, marking a slowdown in inflation. However, the manufacturing sector saw a contraction, with the PMI dropping to 49.2 from 50.3 in March.

Looking forward, the PBAT market in the USA is expected to see price increases in the coming months. Factors contributing to this bullishness in prices include the USA's reliance on PBAT imports, potential disruptions in supply from major suppliers like China and Vietnam, and fluctuations in key feedstock prices. Additionally, low inventory levels across the US supply chain may increase susceptibility to price fluctuations due to supply-demand imbalances.

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