For the Quarter Ending September 2023
North America
In North America, the PBT price trend was upward in the quarter ending September 2023, as consumer purchasing sentiments remained supportive amidst the expectation of a revival in the automotive demand in the coming weeks. The US PBT price trend was also impacted by the reduced production run rates along with Hurricane Idalia, marking the impact of the hurricane season in parts of the USA in the first half of the quarter. The refiners and PBT producers on the West Coast cautiously approached the prospects of the weather disruptions, followed by the challenge caused by the heat this summer. Additionally, fuel markets were effectively closed during this time frame, impacting input costs of PBT. Likewise, an improvement in international and domestic offers in Septmeber 2023 prompted the PBT market bullishness in the US market. Therefore, the PBT market players experienced a shortage of inventories to fulfill the existing offers in the domestic market of the country this week and kept their quotations stable at higher values to sustain better margins. Manufacturers are anticipated to operate at lower rates in September 2023 amidst a significant challenge as a UAW (United Auto Workers) strike threatened to reduce monthly demand for polymers such as PBT from major automobile producers, including Ford, General Motors (GM), and Stellantis, each by 5,000 tonnes based on their first-half volumes in the third quarter of 2023.
APAC
The PBT price trend in the quarter ending September 2023 witnessed mixed market sentiments backed by the escalated concerns amongst market players about the uncertainty in the market situation. During the first half of the quarter, polybutylene terephthalate (PBT) prices in Asia exhibited upward trend, primarily attributed to an uptick in demand stemming from the automotive and electrical sectors. The equilibrium in the market was facilitated by ample stock availability on the supply side, effectively easing the demand-supply gap in the second half of the quarter.Furthermore, the operational rates in China were hampered by the impact of a Typhoon in August 2023, leading to a reduction in PBT supplies. Consequently, market participants made strategic price adjustments to safeguard their profit margins, particularly in response to improving downstream offers. Meanwhile, the supply-side dynamics were influenced by the escalation of BDO (Butanediol) prices in Asia and the surging costs of crude oil. These factors had a ripple effect, constricting PBT production rates and adopting a bullish market environment in the third quarter of the year.
Europe
The PBT prices in the European market were upward in the quarter ending September 2023, backed by the escalated downstream demand, and market players seem cautious about the market situation for the time being. Weak production run rates increased the PBT price trend since the start of the quarter, amidst surging production costs in the line of surging crue oil prices. The concern about the weakness in the downstream demand from the automotive segment amongst the market players led to the stability in the PBT prices in the middle of the Quarter. Further towards the termination of September, the demand conditions improved, with new business inclination at the slow pace, leading to a further marked resileince in procurement activity and input buying enthusiasm in the European automotive sector. Hence, the recent prices of PBT resulted from the limited supplies and rise in the demand momentum prompting elevation in the price trend at the edn of the third quarter. Additionally, the industrial producer price was up in August 2023 by 0.6% and remained resilient in September 2023 with stability in the inflationary pressures in the regional market as per the data released by the Eurostat Commission.
For the Quarter Ending June 2023
North America
The PBT (Polybutylene Terephthalate) prices surged in the Quarter ending June 2023 in the US market, governed by the low supplies and slow improvement in the demand in the electronic sector of North America along with an increasing feedstock PTA (Purified Terephthalic Acid) costs across the regional market. The constant sales and decent profit margins for the manufacturers, despite the slowdown in the economic condition, led to a positive impact on commodity performance during the second quarter of 2023. In the H1 of Q2, the PBT prices increased as the market players reported product shortages in the US market amidst reduced production rates at the end of June 2023. Additionally, price increases resulted from product unavailability and rising export demand from China, along with a rebound in the electronic sector in the regional market. Conclusively, the PBT prices fluctuated in a narrow range at the termination of the Quarter due to sufficient supplies amidst a rise in the production run rates and ease in the upstream materials costs. Moreover, H2 of the second quarter concluded with moderate domestic as well as international inquiries for the product.
APAC
According to the most recent data, the prices of PBT uplifted during the second quarter of 2023 in the APAC market. This rise was a cause of concern for market participants due to supply disruptions and a shortage of inventories to fulfill the current demand for the product. The PBT market was majorly affected by the fluctuating upstream material costs in Q2, including PTA and BDO prices in China. Additionally, a surge in offshore inquiries and reduced production run rates further impacted the pricing movement of PBT in this quarter. The volatility in upstream crude oil prices and the lower availability of feedstock, BDO, contributed to the surge in PBT prices in the mid of Q2. In the first half of Q2, the downstream processing industry demand was low following the Holiday season. As a response to the bearish market, exporters chose to reduce their production run rates during the latter half of the quarter. Conclusively, the PBT price inclination resulted from the shortage of supplies in the second half of this quarter.
Europe
During the second quarter of 2023, PBT prices in the European market experienced relatively stable fluctuations, remaining within a narrow range. This was primarily influenced by subdued demand in the automotive and electronic sectors of North America. Additionally, lowered feedstock BDO and Terephthalic Acid costs and an abundance of available stock in the regional market also contributed to the price stability. Manufacturers faced challenges during this period, as both sales and profits declined due to the tough global economic environment. Macroeconomic factors further impacted the commodity's performance in Q2 2023. In the first half of the quarter, the automotive industry's demand for PBT was affected by inflationary pressures on operational rates. Similarly, the housing segment saw reduced interest, mainly due to a slowdown in the residential sector caused by higher interest rates imposed by the Fed at the beginning of the quarter to control inflation in the European market. These factors had a notable impact on the international PBT market momentum, and as a result, market players stabilized prices by the conclusion of the quarter.
The PBT prices resulted from restricted inventory availability in the US market during the first quarter of 2023. In March 2023, the price of PBT continued to rise, owing to a progressive increase in consumer confidence in the domestic automotive and other competitive businesses in the United States. Moreover, market players opted for a reduction in the production rates in mid-March 2023 this month with an elevating feedstock BDO costs towards the end of Q1 2023. In the meantime, international PBT inquiries rose, impacting commodity price movement in the face of supply constraints. Furthermore, the significant rise in global crude oil prices at the end of March increased the input cost pressure on firms, supporting PBT prices in the US market.
Due to the slowdown in downstream automotive industry demand in the quarter ending March 2023 and limited stock availability, PBT prices showed mixed market sentiments in the first quarter of 2023. On the other hand, with a jump in crude oil prices at the end of Q1 2023 due to production cuts by OPEC along with northward feedstock BDO costs, the PBT market felt supply tightness and raised commodity prices to transmit the cost pressure to Asian consumers. To summarise, the narrowing of the demand-supply gap caused the Asian PBT price trend to remain upward overall during the quarter ending March 2023.
The European PBT price trend continued to remain on the upward side in the March 2023 quarter, with a recent price surge in March 2023. Prices surged in Germany as a result of increasing demand from the downstream sector in the region. The surge in inflation, combined with the cost-of-living crisis, put PBT consumers in financial difficulty in the mid-Q1. Meanwhile, high input cost pressure, along with a steep rise in crude oil costs across the globe, led the PBT prices to gain northward momentum this quarter. Furthermore, market participants maintained an upward price momentum in the first quarter due to muted production activity in the face of competitive market conditions and strike action by industrial workers at the termination of March 2023.
