Quarterly Update on Global Isophthalic Acid (PIA) Market
for the Quarter Ending June 2021
Supplies of Isophthalic Acid were tight throughout the second quarter. Demand surged with the restoration in the industrial activities around the US Gulf Coast and pick up in the manufacturing sector supported by the recovery in supply chains. However, some constraints were present due to the rising global inflation rates. Demand surged from the downstream manufacturing facilities, as the mass vaccination programmes induced the public movement in the North American region, which further pace up the market movement and economic activities. Taking cues from the hiked prices of Benzene and better demand, prices of Isophthalic Acid remained firm in the second quarter of 2021.
The prices of Isophthalic Acid in the Southeast Asian region were fluctuating throughout the quarter as the market activities slumped in the starting of the quarter amid the rising COVID cases in the region. Buyers were heard restraining to procure cargoes amidst hovering uncertainty in the domestic market, although the situation recovered in the later half of the quarter due to pick up in the industrial activities. Ex-Depot discussions for Isophthalic Acid settled at USD 1348 per tonne in June. Demand in the region surged in the second quarter with the surge in exported volumes to the overseas market, specially from the US as the industrial activities resumed In the Gulf coast.
In the European region the Isophthalic acid market outlook improved compared to the previous quarter, as the operation rates improved at several plants after production related hinderances disrupted dynamics in the winter season during Q1. Furthermore, imports from North America and Middle East improved as the several major manufacturing facilities ended their turnaround period. Demand surged from the downstream manufacturing industries as the mass vaccination programmes and ease in restrictions improved the offtakes from the plasticizers industry.
For the Quarter Ending March 2021
Isophthalic Acid market in the North American region witnessed constrained supplies during the first quarter of 2021, owing to shortages related to the key feedstock chemicals due to capacity loss of about 70% in the US petrochemicals production. The industrial infrastructure in Texas and nearby gulf region was severely marred by the polar winter storm which led to the plant shutdowns for several weeks. Halted production of the key feedstock chemicals hindered the PIA supplies in the American markets. Shortages were reported in Latin America due to constrained US supplies. Demand from the downstream PET and UPR producing industries surged amid the supplies shortages, further resulted in high prices of PIA in the domestic market.
The supplies of Isophthalic Acid in the Asian market were tight-to-balanced, owing to the low inventory levels of the key feedstock m-Xylene as several refineries including CNOOC's Huizhou petrochemical, Sinopec's Jiujiang Petrochemical among others, were on a maintenance turnaround in second half of the quarter. Demand surged due to better offtakes from the plasticizers and polyester sectors. The widened supply-demand gap further supported by the strengthened crude oil stimulated surge in the prices of PIA in Q1 with FOB Shanghai prices in March settling at USD 1460 per tonne.
During the first quarter of 2021, the Isophthalic Acid market witnessed tight supplies, due to hampered transportation between Amsterdam-Rotterdam-Antwerp routes amid severe winters in the northwestern region. The transportation lag further caused shortages in key feedstock chemicals. PKN Orlen facility in the Poland faced sluggish production at its Phthalic Acid facility. Shipments from the USA declined amid bad weather conditions and logistic delays. Demand from the downstream PET Resin was high from the packaging sector.
For the Quarter Ending December 2020
The supply of Isophthalic Acid in China remained sufficient with constant plant operating rates of downstream industries, while in rest of the APAC region, especially India, supply tightened due to higher freight charges. China’s demand remained comparatively flat with downstream polyester facility keeping rates generally steady. The demand from the import side especially from India was approximately healthy, as the polyester operating rates were kept at high levels which consequently positively affected the prices of Isophthalic Acid in India. Henceforth, Isophthalic Acid prices in India averaged at USD 1036 per MT Ex-Depot Mumbai in the quarter ending December 2020.
Many chemical distributors shut their supplies in Netherlands in Q4, as they faced difficulties in trading along several routes. Due to lockdown, arrivals of Isophthalic Acid cargoes from APAC region in Q4 was also delayed, as there was increased requirement for the plastic and packaging industry. As the market is expected to bounce back in Q1 under the buzz of roll out of Covid-19 vaccines, by the end of December enquiries of Isophthalic Acid revived considerably which led to a significant increase in its prices in the European Region in the quarter ending December 2020.
Demand for Isophthalic Acid in Q4 was deemed feeble in North America due to slowed market activities following the spate of hurricanes in October. Furthermore, demand for the plastic industry also remained silent, as these segments largely utilized in end-use industries like automotive, packaging and construction industries which are yet to trace a pre-lockdown level. Isophthalic Acid players are recovering from their losses that were witnessed in Q3 but as the demand is still feeble it might take some more time to reach pre pandemic levels.