For the Quarter Ending September 2023
North America
Polybutylene Adipate Terephthalate (PBAT) prices throughout the third quarter have continued to follow the bearish trend that started in June in North American territories. In the first half, adequate availability of upstream inventory, declining demand from the downstream electronics industry, and a moderate manufacturing rate have suppressed demand strength overall. The competitive market of PLA and PHAs has also provoked traders to reduce their margins on PBAT. Lower prices of upstream Adipic Acid, Butanediol, and fuel Natural Gas due to poor consumption and lengthy supply have supported the production cost of PBAT to hold a competitive lower position. Moreover, high domestic inventory levels and a stronger US dollar have forced import price quotations to be lower. Furthermore, overseas purchases have seen no growth due to declined demand in the downstream packaging industry. In the second half, though unplanned plant stoppages in overseas Asian countries have been putting pressure on supply operations, underwhelming downstream industry demand has limited long-term pressure on pricing. Sluggish manufacturing industry, declining new orders, work backlogs, and low output expectations have all put the U.S. market in uncertainty. As data reported, U.S. PMI registered a decrease, falling from 48.8 in July to 47.3 in August, indicating a shrinking manufacturing industry. Reduction in the number of new orders has affected production lines. According to the latest data revealed from retailers, U.S. consumer spending has been under stress in September, indicating a gloomy outlook for the holiday season. Moreover, markets have been watching the upcoming Federal Reserve meeting amidst oil market volatility. Thus, PBAT prices as of Sept. 29 have closed at USD 1665 per metric tonne, CFR Los Angeles.
APAC
Polybutylene Adipate Terephthalate (PBAT) prices in India’s market have continued the bearish tail of the last quarter. In the first half, due to the strong supply of upstream raw materials throughout the Asian market and moderate demand from the sustainable packaging industry, PBAT prices have not received enough support. The PMI of India was 57.7 in July, which gave a sign of stable manufacturing units' operating rates throughout the month of July. In August, however, PBAT prices in Vietnam have shown little improvements. The inflation rate in Vietnam has been reported under control, valued at 2.06%. However, a surging rate has been forecasted. The growing demand in the downstream food packaging industry and price hikes of upstream raw materials have maintained a stable market. In Vietnam, furthermore, the producers of synthetic polymers have been under pressure provided by the government to use biodegradable materials for the sustainability of the world. However, in terms of international trade, rising tension between China and The West has hampered trade reliance with China and hence China’s export demand. As reported, China has been in a state of deflation- Consumer prices have sunk by 0.3%. Moreover, due to geopolitical conflicts and several China-diversifying policies, many companies have been looking to move their China manufacturing hub to Southeast Asia. Moreover, a downturn in the downstream polyester market of China has been revealed, which has been linked to China’s sluggish economic growth and global supply disruptions. However, the August prices in India have maintained their stability because of a wait-and-see attitude amongst suppliers. The upstream crude oil market volatility and steady downstream sustainable packaging demand from the FMCG industry have kept the PBAT market stable. Several maintenance shutdowns of Southeast Asian manufacturing plants have revealed a sluggish demand from downstream industries.
Europe
Following the second quarter, the third quarter in the European economy has witnessed a continuous drop in Polybutylene Adipate Terephthalate (PBAT) prices. In the first half, declining frequency of quotations from downstream electronics and packaging industries have indicated a significant decline in PBAT demand both internationally and domestically. Market rivalry with its alternatives such as PLA or PHA has also supported the price drop. Adequate availability of inventory and a moderate manufacturing rate have suppressed demand strength overall. Italy’s inflation rate in July was reported to be on a downtrend, at 5.9 % lower than the previous month's inflation of 6.4%, as data provided by the National Statistical Institute. A registered slowdown in prices of transport services of non-regulated energy products (decline from +8.4% to 7.0%) and process-food products (a drop from 11.5% to 10.5%) has been reported. Moreover, overseas purchases have decreased due to a huge deficiency in trade reliance with major trading countries like China. Moreover, lower traded prices of upstream Acetic acid and stable paraxylene prices have contributed their respective percentages to the production cost. In the second half, the demand for petroleum products has also been losing ground after Hurricane Idalia made its landfall. The polyester markets have reported a drop in one of the major overseas markets, China. Other recycled products markets such as PET and chip market remained relatively stable, signifying a slowdown in the polyester PBAT market. Furthermore, a key source of weakness in the European economy has been Germany, whose manufacturing and export-oriented economy has been hit by higher energy prices and slowing demand in China, as reported by a key trade partner. Regional investors have been preferring to invest in China rather than its domestic market due to the foggy economy and low demand in the downstream packaging industry.
For the Quarter Ending June 2023
North America
Throughout the second quarter of 2023, PBAT prices inclined in the North American regional market owing to the moderate demand outlook from end-use manufacturing units and inclined imported prices. Three major cities in the US (San Diego, Los Angeles, and New York City) followed the ban on single-use plastic consumption, consequently raising the demand. The US Federation also continued to raise the interest rate on a higher edge in the second quarter, impacting the PBAT prices and keeping it on the higher side. Market participants have revealed crumbling stock levels while PBAT accessibility in the domestic market was to a great extent as import flow was likewise weak on the US shores. Moreover, the US Ports of Long Beach and Los Angeles have seen a lack of workers and dockworkers, which at last prompted the closure of the ports. In the US, controllers have closed down and sold three medium size US banks starting from the start of Spring that is Silicon Valley Bank, Signature Bank, and First Republic. Towards the quarter's end, PBAT prices were 2219 per MT, CFR Los Angeles.
Asia Pacific
PBAT market dynamics in the Asia Pacific region showcased mixed market dynamics throughout the second quarter on account of fluctuating demand frequency throughout the quarter. Major facets governing the overall price dynamics of PBAT included the declining feedstock (adipic acid) accompanied by the relaxed energy prices significantly impacting the overall production cost of PBAT in the Asian region. China's economy developed 6.3% in the subsequent quarter, which was quicker than the 4.5% development seen in Q1. The development number was, to a great extent, because of base impacts. The Chinese government centers more on the production and utilization of biodegradable packaging material significantly among online food administrations and agricultural areas. The interest for the item from drug creation units alongside the rising interest for mulching films from the rural area. As per the National Development and Reform Commission and the Ministry of Ecology and Environment of China, the end-use producers confronted a supply lack prompting cost tendency in the country. Container oversupply was seen in the Chinese ports prompting shipping lane disturbance in the worldwide market. Hongqing Jianfeng New Material Co., Ltd. Of China will manufacture more PBAT as the improvement season of the PBAT project in the upcoming quarter. Towards the quarter's end, PBAT prices were 1893 per MT, FOB Qingdao.
Europe
PBAT prices in the European market remained on the upper side on account of the inclined demand outlook amidst the relaxed prices of feedstock (adipic acid and butanediol) in the domestic market. Improved modern tasks alongside better interest viewpoint fundamentally affected the general market elements of PBAT. Tight stock alongside a better interest standpoint had slanted the costs of PABT in the midst of the steady interest viewpoint. Inventories worked on full edge to satisfy the interest from downstream areas. The interest in mulching films represented the general market costs of PBAT as the spring halls are on top of relatively administering the general market elements of PBAT. The steady effect of rising expansion had kept buyers in Germany from submitting bigger requests. Producers kept costs low to draw in additional clients. Inventories were adequate to take care of the homegrown interest. Moreover, market competition with other biodegradable resins raised the prices and the consumption rate inclined in the regional market.
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.
