For the Quarter Ending March 2023
North American market witnessed a declining trend in Q1 of 2023 on account of fluctuating feedstock (adipic acid and butanediol) prices in the domestic market. After the New Year holidays and the disruption caused by Storm Elliot in the United States, demand remained slow in the market. The demand for PBAT remained poor throughout the week as consumers sought alternatives, lowering local production and sales. The market freight prices between the United States and Asian countries have reduced because of the weak demand outlook. Following the bank crisis, US chemical and industrial units suffered financially, affecting general market sentiments. Demand from downstream (biodegradable food packaging units) remained consistent, with sufficient stockpiles to meet domestic demand. Towards the quarter's end, PBAT prices were 2087 per MT, CFR Los Angeles.
In the Asia-Pacific market, the market prices of PBAT followed the declining trend in the Q1 of 2023. The Asian market was impacted by the Lunar holiday halt in production activity and supply disruption in China. Although the Chinese market resumed production in mid-quarter, the supply chain remained disrupted due to a workforce shortage. The price of the feedstock adipic acid and butanediol declined in the third month of Q1; hence the price of PBAT was significantly impacted as production costs declined. The overall market dynamics were influenced by the declining trend of one of the feedstocks, as well as reduced demand for the product. Towards the quarter's end, PBAT prices were 1716 per MT, FOB Qingdao.
The market prices of Polybutylene Adipate Terephthalate (PBAT) continued to follow the southward momentum throughout the first quarter of 2023. The looming economic downturn had put pressure on manufacturers to keep prices stable. Domestic vendors did not receive many inquiries. The European PBAT market declined due to a weak downstream (biodegradable packaging) sector and a drop in new order placement with manufacturers. Feedstock prices (adipic acid and butanediol) have remained low, affecting the production costs of PBAT. The supply chain was drastically impacted by the series of protests by union members in European countries. Inventories were adequate, but capacity was reduced due to a weaker demand projection. Towards the quarter's end, PBAT prices were 2035 per MT, FOB Hamburg.
For the Quarter Ending December 2022
In the North American market, Polybutylene Adipate Terephthalate (PBAT) prices witnessed a declining trend throughout the fourth quarter of 2022. The International Longshore and Warehouse Union member stopped the vessel from operating on the shore, lengthening the product's travel time. As feedstock (adipic acid and butanediol) prices dropped in the regional market, the overall prices of PBAT also declined. As a result of the railway union member's planned strike, the region's supply chain was impacted. Low industrial output was caused by declining demand, which affected inventories. Demand conditions on both domestic and foreign markets had weakened as new export orders declined. In the domestic market, employment growth slowed as demand on available capacity declined, and work backlogs lessened. Prices of PBAT were similarly impacted by the decline in the dollar rate. Towards the quarter's end, festive holidays led to a temporary halt in the operational activity of PBAT in the regional market, proportionally impacting the final prices.
In the Asia-Pacific market, the market prices of PBAT followed the declining trend in the Q4 of 2022. China and Vietnam are the major manufacturers of PBAT. The feedstock (adipic acid) prices had declined in the regional market, proportionally impacting the final prices of PBAT. As operating activities in the regional market have slowed, the tight limits that the government authorities have once more imposed have impacted the Chinese manufacturing sector. Even if the Chinese market's industrial operational rate has improved, manufacturers still struggle with a staffing shortage due to the COVID infection backlog. Despite the product's sluggish demand, the Vietnam PMI fell, impacting the operational pace in the domestic market. Manufacturers were reluctant to sell their available stock, which restricted supply; at the same time, spot auctions and competitive purchases impacted the final prices of PBAT. The demand for the product from the biodegradable food packaging sector remained slow throughout the quarter in the regional market.
The market prices of Polybutylene Adipate Terephthalate (PBAT) continued to follow the southward momentum throughout the fourth quarter. In the German market, PBAT prices continued to decline as a result of weak demand and fewer inquiries. The downstream polymer and packaging sector showcased a slight interest in buying the product, and the fundamentals of demand for the product on the European market have been weak. The country's inflation rate caused a slowdown in PBAT production for the German market. The suppliers faced low inquiries as fear of economic recession in the upcoming quarter, and higher energy prices restrained the end users from making more inquiries about the product.
For the Quarter Ending September 2022
In the North American market, the Polybutylene Adipate Terephthalate (PBAT) prices witnessed mixed sentiments as the operational rate of the product also remained low. The fluctuations in the global petrochemicals market significantly impacted the freight charges. In August and September, speculation about a US recession gained traction as consumer demand fell and inflation rates for several commodities continued to rise unabatedly. Sluggish demand from downstream businesses, such as the Biodegradable polymer chain, tipped the scales in favor of the US economy's slower growth rates. Although PBAT production in the United States gradually improved, the amount of PBAT available for import from Vietnam and China remained limited. The domestic market's declining feedstock (butanediol) prices significantly influence PBAT market prices. Inflation in the country was proportional, affecting PBAT demand and production rates. Furthermore, due to piled-up cargo at the port, the supply of the product from the major exporting nation, China, remained uncertain. As a ripple effect, the Polybutylene Adipate Terephthalate prices for CFR Los Angeles (USA) settled at USD 4150/MT.
In India, the PBAT prices witnessed a stagnancy price trend because of lower production rates. Production and operational rates were constrained due to the astronomical rise in upstream fuel prices. Higher PBAT costs were caused by logistical issues and a lack of domestic suppliers. Furthermore, rising demand and a positive buyer mood in the downstream biodegradable plastics and packaging sectors have kept the upward trend. The PBAT market's declining trend has been exacerbated by weak demand from end-use industries. Furthermore, the Southern region of China saw decreased purchasing activities due to the local market shutdown rather than the power crisis. Imports of the feedstock, maleic anhydride, from the Chinese market have remained limited due to the country's narrow vessels, resulting in a delayed transit time of the product in the domestic market. Furthermore, feedstock and maleic anhydride imports from the Chinese market have remained limited due to the country's limited vessel capacity, resulting in a delayed transit time of the product in the domestic market. As a ripple effect, the Polybutylene Adipate Terephthalate prices for FOB Qingdao (China) settled at USD 2940/MT.
In the European market, the PBAT prices showcased a fluctuating price movement in the third quarter of 2022 as the production and operating rates were restricted amidst skyrocketing fuel costs. Higher PBAT prices in the German domestic market were driven by logistical issues and a scarcity of supply. The lack of inquiries from the downstream packaging sector dampened market sentiments for PBAT resin in the domestic market during August. According to market sources, traders are ready to bargain over spot purchases as the fear of recession looms over the heads of the country's major players. The termination of natural gas prices from Russia has harmed the production rate and cost of PBAT. Domestic PBAT production has also remained low due to lower demand for the product and limited energy for PBAT production. Nonetheless, the country's energy crisis remains a significant concern among market participants, which may disrupt pricing dynamics in the coming months. As a ripple effect, the Polybutylene Adipate Terephthalate prices for FOB Hamburg (Germany) settled at USD 4100/MT.
PBAT resin prices soared to USD 4005/tonne CFR Los Angles this quarter, Due to rising demand and limited supply. While PBAT production in the United States gradually improved, the amount of PBAT available for import from Vietnam and China remained limited. Low production rates resulted from a paucity of raw materials such as BPO and Adipic Acid, as well as routine maintenance. As PBAT demand in the domestic market of the United States increased, this pricing pattern emerged. The paper and coating sectors were hampered by a lack of supply and low stocks among downstream firms, resulting in rising production costs in the region.
PBAT resin prices have fallen in the Asia Pacific market since May 2022, owing to lower demand fundamentals and a lack of market activity. "An Phat Holdings" in Vietnam is the major player in the PBAT market, which has increased the operating rates. Due to availability and a minor decrease in downstream demand, the price of feedstock BDO decreased, placing upward pressure on the price of PBAT in China. With the resurgence of Covid 19 and lockdowns in some parts of the country, domestic production and international trade activities have been hampered. The supply-demand imbalance and the constantly altering upstream crude oil value chain are largely to blame for this pricing volatility.
Back to lower production rates, PBAT prices in the German market climbed in June. Production and operating rates were restricted as upstream fuel prices skyrocketed. Logistical issues and a scarcity of suppliers drove higher PBAT costs in the German domestic market. Furthermore, rising demand and favorable buying sentiments in the downstream biodegradable plastics and packaging sectors have maintained an upward trend. The price of Polybutylene Adipate Terephthalate FOB Hamburg averaged during June was assessed at USD 4033/MT, maintaining the upward trend. Furthermore, PBAT prices are mainly hampered by the increase in feedstock BDO, PBAT, and Adipic Acid prices.