Truck Drivers Strike in South Korea, Impacts Purified Terephthalic Acid Supply

Busan, South Korea: South Korean industry sources reported that a nearly week-long truck drivers strike is disrupting the petrochemical manufacturing and supply of the product. On June 8, the Cargo Truckers Solidarity union went on strike, requesting reasonable fares to be extended. This is hampering the supply of Purified Terephthalic Acid, leading to the stockpiling of inventories.

If the truck drivers strike in South Korea is prolong further, in that case, there is a strong likelihood that petrochemical plants, including purified Terephthalic Acid (PTA) and downstream facilities, will cut production, which may affect the whole value chain of Purified Terephthalic Acid derived products.

Purified Terephthalic Acid prices in South Korea dropped on the back of disrupted supply amid sufficient inventories. Recently, prices for Paraxylene (PX) and purified terephthalic acid (PTA) are expected to fall in South Korea. Furthermore, the supply of Paraxylene is enough. Still, the demand is low because the strike's impact was heard less significant on South Korea's paraxylene producers as such liquid chemical is transported by pipeline rather than trucks, several sources based in South Korea said. Purified Terephthalic Acid is likewise in plentiful amounts, but supply disruption limits the pace of downstream polyester, resulting in more significant Purified Terephthalic Acid inventory levels.

Though, Crude oil prices has risen in the first half of June but are projected to fall in the coming months as the OPEC+ nations have agreed to increase output by 648 thousand Barrels Per Day (BPD) in July, lowering crude oil prices. Meanwhile, it is visible that the prices of Purified Terephthalic Acid in China and South Korea together are decreasing after sufficient inventories and low demand from China's domestic market. China, on the other hand, has reimposed lockdown restrictions on account of increasing new COVID cases in some provinces of China like Beijing.

As per ChemAnalyst Analysis, "The changing atmosphere in the global market is likely to impact the global supply-demand chain alongside the volatile crude oil prices due to Russia-Ukraine war and low demand arising, as China reimposes lockdown restriction, while Truck driverss further fuel strike disrupting the supply of the product to its domestic as well international market. Therefore, Analysts predict that the prices of Purified Terephthalic Acid may change for the reasons mentioned above.