The PBT Price Declines Continue With the Bearish Demand Situation in the US and Asia

The Poly Butadiene Terephthalate (PBT) prices witnessed a bearish market situation in the first half of October 2023 in the line of surplus supplies and low production costs globally. Additionally, the waning regional offtakes in the PBT industry exerted downward pressure in the H1 of the month, along with subdued downstream demand fundamentals. Moreover, a slow recovery in the economic conditions of the APAC region pulled the demand fundamentals southward side, pausing the movement in the PBT price trajectory this week.

In the USA, the  PBT prices were stable because of the high supply and steady demand from the automotive and electronic industries. From an upstream viewpoint, the PBT price stabilization resulted from several factors, with a rise in the production costs amidst elevating feedstock Butanediol (BDO) prices and slowed offtakes in the downstream automotive and electronic segments. Concurrently, restrained demand in the international market has exerted negative pressure on PBT pricing dynamics. Therefore, the recent stability in the PBT price trajectory has been exacerbated by economic weakening, which has led to a decline in procurement activities, as consumers have adopted a cautious approach, anticipating further price reductions. Furthermore, persistent uncertainties surrounding future orders within the downstream automotive sector, compounded by elevated operational costs and volatile crude oil values, have continued to impact the PBT costs in the North American region since the third quarter.

The Asian PBT market participants exhibited downward pressure due to the lack of demand in the first half of October 2023. Buyers were either making only essential purchases or adopting a cautious "wait-and-see" stance, expecting prices to drop further in the Chinese market. The underperforming businesses and global economic uncertainties primarily prompted the reduced demand in downstream industries. Additionally, the absence of Chinese participants over the National Day holiday also contributed to the suppressed market sentiment during the first half of the month, affecting the price rally of PBT.

As per the ChemAnalyst, the prices of PBT in October 2023 are likely to improve amidst a revival in the downstream market situation and tight supplies with the rise in the upstream WTI crude oil prices as a result of delayed operational rates amid the impact of Hamas-Israel War. The price dynamics of PBT are also expected to be impacted by the elevation in the feedstock Butanediol (BDO), and TPA costs amidst northward pressure on the PBT manufacturers and traders with a shortage of supplies across the global market.