For the Quarter Ending March 2022
In North America, the price for Purified Terephthalic Acid witnessed a seesaw trend where prices declined in January, rebounded in February, and again dipped in March. The feedstock prices too fluctuated with the volatile crude oil price. The downstream PET and polyester industries saw growth in demand from consumers and businesses as industrial activities picked up the pace. Further, revenue and sales of the major producers have also increased with the increase in their consumption from the consumer’s end. Therefore, strengthening supply dynamics and stable demand fundamentals have pressured market participants to weaken the prices of the available material in the later stage of Q1. After the conclusion of Q1, the price for PTA settled at USD 986 per MT FOB Charleston.
In India, after having a lacklustre Q4 2021, PTA prices in India have observed a change in momentum in Q1 2022. PTA prices steadily increased and the price change was attributed to the increased demand from downstream users and increased cost pressure from upstream xylene. Demand from downstream Polyester and Polyethylene Terephthalate remained strong throughout Q1 of 2022. Consequently, PTA prices after the conclusion of Q1 were assessed at USD 1084.91 (INR 82290) per MT Ex-Kandla. The Purified Terephthalic Acid market saw an upward trajectory in the Chinese domestic market on the back of high demand from downstream PET and textile industries and rising feedstock prices. In addition, Zhejiang Yisheng Petrochemical announced the permanent closure of its oldest 650 KTPA Purified Terephthalic Acid (PTA) No.1 line at its Ningbo site located in East China’s Zhenjiang province. Further in the later stages of Q1, against China’s zero-tolerance policy, port Yantian, a major exporting port to Europe, has been closed, hampering the supply chain dynamics. Thus, the price for PTA rose and settled at USD 962 per MT Ex-Qingdao in the first quarter of 2022.
The Russia-Ukraine war in H2 of Q1 caused havoc in crude oil prices globally, affecting crude oil derivatives price trend. During Q1, the prices of PTA in the European market declined in February, which later gained momentum in March. The wind of change was caused by improved demand from end-users and increased cost pressure from upstream Paraxylene. Afterward, the imports of crude oil and natural gas from Russia to Europe were hampered due to the logistics issues. Demand from downstream Polyester and PET remained firm throughout the quarter, where PET prices broke charts in Q1 amid spiking demand and limited product availability. Thus, amidst the volatile market, the price for PTA in Europe settled at USD 824 per MT FD Hamburg.
For the Quarter Ending December 2021
In quarter IV, PTA imports remained sluggish from South America and Asia. Mexico struggled with domestic production which curtailed exports to USA while resolutely high freight charges and shipping costs restricted the Asian exports to reach US shores. Meanwhile, downstream PET resins maintained strong volume intakes as consumption from packaging industry remained strong. PTA prices were assessed in strong ranges due to robust demand and lopsided supply dynamics. PTA price increased to USD 1170 per MT on FD basis in December.
Logistical issues plagued Indian PTA market in October which posed a major challenge for traders and in turn kept an upward pressure on domestic PTA prices. Other than just shipping woes, additional factor i.e., disturbance in production activities in Chinese market become an additional factor behind this steep rise in price of PTA across APAC region. Therefore, PTA prices rose significantly in October and assessed around INR 75640/MT CFR JNPT. Despite of the fact that demand for PTA reduced from downstream polymer segment in H2 of Q4, other sectors like textile, maintained stability for PTA demand across regional market. However, PTA prices in India tumbled in December influenced by low offtakes from downstream polyester segment.
PTA production remained underwhelming throughout which further limited the operating rates of downstream PET resin. Demand from PET remained strong throughout where market participants remarked that market have witnessing some outrageous consumption numbers from the end users. Increased usage of PET bottles across the continent in beverages and other applications pressured the demand for PET resin. Imports of PTA from were hampered due to resolutely freight charges and prolong turnaround time. Consequently, prices of PTA in Europe were assessed at an incessant rise in Q4 and were measured at USD 890 per MT in December on FOB basis.
For the Quarter Ending September 2021
PTA values remained firm in the North American region during Q3 of 2021. Factors such as raw material supply crunch and buoyant demand from the packaging industry after the recovery in the economic sector pushed up the pricing curve of PTA. Disruptions in the production and supply chains due to Hurricane Ida which made landfall in the U.S. Gulf Coast in August end further added to the supply tightness in the region. Moreover, logistic issues, especially the truck availability led to the delays in the deliveries of the product in the region that further contributed the pricing trend of PTA. Prices of PTA were assessed in ranges of USD 1110-1150 per MT FOB Texas during the quarter.
In Asia, PTA prices showcased an upward trajectory in the third quarter of 2021 backed by the firm offtakes from the regional downstream manufacturers and spike in the upstream prices. In India, PTA market outlook appeared bullish due to the robust demand from the PBT and PET industries amidst the tight supply fundamentals. In addition, delayed supplies followed by the congestion on several ports in China along with the expensive imports from the other countries due to the exorbitant freight charges and unavailability of shipping containers contributed to the inflation in the prices of PTA in the region. Thus, prices of PTA rose to USD 467.38 per MT from USD 360.44 per MT during July to September timeframe.
In Europe, PTA market witnessed firmness during the third quarter of 2021. Prices of Purified Terephthalic Acid (PTA) traced the values of the feedstock prices that remained high throughout the quarter. Various factors including delayed imports due to disruption in the supply chain and lower production in this period followed by the natural gas crisis in Europe. Moreover, soaring freight charges also fumed the values of PTA in this quarter.
For the Quarter Ending June 2021
PTA supplies in the North American region, improved comparatively over previous quarter as the industrial infrastructure restored in the US Gulf coast, and major manufacturing sites were operating at optimum efficiencies. Despite that, the regional supplies remained tight during the second quarter of 2021 due to affected imports. The Mexican PTA trade slumped during the second quarter owing to the strengthened replenishment of inventories ahead of the upcoming hurricane season in the North America. Demand was bolstered from the downstream polyester industries as the offtakes witnessed a seasonal peak with the rise in textile manufacturing. As a ripple effect, PTA pricing took an uptrend with FOB Texas discussions settling at USD 1250 per tonne, showing an increment of 17.92% in the month of June itself.
PTA supply outlook in the Asia Pacific region observed a mixed trend during the second quarter of 2021, owing to the series of planned turnarounds in China and NE Asia which tightened the overall product supply after following the uptrend in the first half of the quarter. A leading Chinese PTA manufacturer Yinsheng Petrochemical commissioned its two new PTA units in May. Also, due to the better production margins in its new PTA lines, Yinsheng Petrochemicals announced the permanent closure of its oldest 650 KTPA (PTA. No 1 Line) in Zhenjiang province. Noting the series of capacity additions, it is anticipated that China will further expand its PTA capacity by additional 3.3 million MT in H2 2021. Against the backdrop of already lengthening supplies, markets participants were closely tracing the movement in the Indian demand patterns as the second wave of pandemic dented the demand by the biggest Asian PTA importer. The pricing trend in China showed marginal falls with FOB Qingdao prices assessing at USD 859 per tonne in June.
The supplies conditions in the European PTA market improved over the last quarter as an upstream Paraxylene unit ended its turnaround period in the mid of the second quarter. However, limited product availability in the US market affected the export volumes to the European region. Some South Korean PTA exporters were heard sending volumes to the European and Turkish markets, to leverage the Free Trade Agreements with these countries. Freight charges in the Atlantic region dropped, as a ripple effect, arbitrage window between the Europe and North America strengthened. Resumption in the market activities supported the public movement in several parts in Europe that further prompted surge in PTA demand from the polyester sector.
For the Quarter Ending March 2021
The Purified Terephthalic Acid (PTA) market in the North American region remained tight during the first quarter of 2021, due to production disruptions amid the unprecedented arctic freeze in the US gulf region. The abrupt weather conditions caused unavailability of key feedstock for several weeks due to plant shutdowns. The demand from the downstream PET sector surged, following strong competition among the buyers to replenish their inventories ahead of the expected rise in demand in the upcoming years. PTA prices witnessed an uptrend taking cues from the surge in prices of upstream Benzene and Paraxylene.
Supplies in the Asia Pacific region strengthened due to the addition of new PTA facilities in China during Q1 2021. Total 7.9 MT per year of PTA capacity was commenced from Fujian Baihong plant in Quanzhou, Shenghong petrochemical at Lianyuangang, and Yisheng petrochemicals at Ningbo. However, some constrains were witnessed in the region due to several plant turnarounds amid Chinese lunar new year holidays. Demand was deemed healthy in the first quarter, as the exports to the western region and import demand from the southeast Asian region improved. Prices of PTA in FOB Shanghai followed an upward trajectory throughout the quarter averaging at USD 908 per MT for April deliveries.
Supplies in the European region remained tight during the Q1 2021, owing to the hampered transportation in the northwest European region that led to the shortage of key feedstocks. PKN Orlen facility in the Poland witnessed significant decline in PTA production, followed by the unplanned outage in the INEOS PTA facility in Belgium. Further imports to the region declined amid the Suez Canal blockage and high shipping cost during the quarter end. However, due to the supply chain disruption, demand from the downstream PET sector surged during the Q1 2021.
Supply overhang of PTA (Purified Terephthalic Acid) in the Asia Pacific region eased in the near term as several manufacturers in China and India imposed a temporary turnaround amidst wavering concerns over coronavirus spread and dwindling polyester demand. However, the impeding start-up of new PTA capacities in China by the next quarter has stressed manufacturers and traders over surplus production in times of hovering downstream demand. As per the industry experts, the market outlook of PTA industry is likely to remain under downward pressure in the next quarter as well, with supply outstripping the demand.
As the region has geared steady pace to resume activities after considerable upliftment in lockdown restrictions, the demand for PTA from the polyester as well as plastic industry has witnessed a much-needed recovery after witnessing a prolonged dullness in the previous quarter. However, improved market fundamentals are likely to shroud in the coming months with increment in PTA cargoes from Asian region following the slated capacity additions from the production hub, China. Furthermore, concerns over resurgence of coronavirus in several parts of Europe has also raised serious concerns over demand outlook of PTA in the near term.
The North American PTA market has gained considerably amidst the increased demand for packaging materials due to rising coronavirus contagion and is anticipated to receive further boost from the sudden shortage of aluminum cans in the region. Increased demand on positive shift in consumer sentiments towards single-use plastics has provided the US PTA industry with appreciable gains. And as long as the shortage of aluminum can persists, the regional PTA market is unlikely to face severe challenges from demand side. However, the prolonged slowdown in Polyester industry has marginally dragged the present growth of the PTA market from the packaging sector.