For the Quarter Ending March 2023
North America
During the first quarter of 2023, the price of Purified Terephthalic Acid (PTA) showed an upward trend, with prices reaching USD 1015/MT FOB Charleston in February. The price increase in January could be attributed to a series of production disruptions, while the March increment was influenced by rising crude oil prices and a labor shortage in the US market that disrupted supply and production. However, despite the price increases, new orders continued to decline, with new export sales decreasing for consecutive months, likely due to higher interest rates and inflationary pressures affecting demand. Overall, the first quarter of 2023 saw PTA prices trending upward, with various factors impacting supply and demand dynamics in the market.
APAC
Purified Terephthalic Acid (PTA) processing margin was volatile in Q1, with prices experiencing both decreases and increases throughout the quarter. The mid-quarter decline in prices was attributed to various factors, such as production shutdowns, changes in supply and demand dynamics, and bearish market sentiment. The shutdown of units like Yizheng, with a production capacity of 650/MT, for one week in end-Feb affected the supply side of the market and put pressure on prices. However, the increment in PTA prices for most of the quarter was largely dependent on the demand outlook and volatile feedstock market, as downstream industries experienced rising demand. Overall, the PTA market in Q1 seemed to have been influenced by a combination of supply and demand factors, along with fluctuating feedstock prices.
Europe
The price of Purified Terephthalic Acid (PTA) was influenced by various factors, including declining demand, changes in pricing for crucial raw materials such as Paraxylene, and fluctuations in the Crude oil market. In addition, the high inflation rate in the eurozone had an impact on the PTA market. Despite steady production rates, supply was disrupted towards the end of the quarter due to worker protests in Europe over low wages and poor working conditions. However, the industry's capabilities were sufficient to meet current demands. Even though the amount of labor at PTA factories decreased and downstream polyester demand remained moderate, PTA was still being destocked. In Europe, PKN Orlen in Wloclawek (Poland) was shut down for maintenance from 1st March to 31st March 2023.
For the Quarter Ending December 2022
North America
The Purified Terephthalic Acid (PTA) market price in North America continued to fall throughout the fourth quarter of 2022. The price drop was mostly due to a decrease in downstream packaging industry demand for PET bottles in Q4. Despite workforce scarcity in the US, production costs increased, but a lackluster domestic market kept prices down. Meanwhile, slowing demand brought attention to the large inventory build-up, keeping export and domestic pricing under pressure. Regional export and domestic prices were following weak price trends as a result of a lack of buying activity. An array of factors, including excess inventory, increasing inflation, and skeptical client attitudes, were exerting pressure on certain retailers' profitability. Conclusively the price for PTA in the US market declined and settled at USD 1025/MT FOB Charleston during October 2022.
APAC
The Purified Terephthalic Acid (PTA) market witnessed moderate demand from downstream industries, and the price was declining. Throughout the fourth quarter of 2022, the PTA market has been under downward pressure since November as additional polyester facilities were scheduled to curtail output, and new Paraxylene and PTA capacities were scheduled to start operations. In the meantime, a pessimistic outlook caused the PTA margin to decline, and prospective output decreases by PTA manufacturers were noticed in the Korean market. As a result, during November, the price of PTA was found to be circling USD 823/MT FOB Busan. Additionally, as large feedstock paraxylene plants started to emerge in China, PTA makers were apprehensive about how many terms of cargo to contract in China towards the end of 2022 amid sluggish downstream demand.
Europe
In the fourth quarter of 2022, Purified Terephthalic Acid (PTA) producers reported stable to weaker demand, and prices were reduced by around 5% in the quarter's second half. While some of them agreed that demand was steady, others complained about a significant decrease in demand. A distributor said that their demand was lower than usual in December, so they did not lower prices any further because it would not help sales. In conclusion, in November, the price of PTA in Germany hovered around USD 906/MT FD Hamburg. Converters were plagued by worries about a possible recession and the decline of the economy. While product availability was sufficient to satisfy consumers' overall demand, European producers had reduced production in response to the weak demand.
The market sentiment for PTA has been sluggish in the first half of Q3. The factors that ruled over the market were low demand, high inventories, fear of recession, and dull consumer confidence. The sharp drop in PTA prices was mainly driven by weak demand for PET from the packaging sectors. Meanwhile, the packaging and Polyester sectors were oversupplied in the market, limiting consumer interest in procuring fresh material. In addition, the Paraxylene-Naphtha Spread has reduced even more as crude oil prices kept falling compared to the past few months, given the persistently bearish demand. However, the market has been flourishing towards September as rising production costs weigh on the ongoing market trend. Conclusively, the price for PTA dipped by 1.8% on a Charleston FOB basis during August 2022.
The price trend of Purified Terephthalic Acid (PTA) continued to decline throughout the first half of Q3. The sluggish demand sentiments from end-user polyethylene terephthalate and polyester sectors in the domestic market compelled companies to reduce their profit margins to increase the trade of goods. Also, Purchasing Managers Index (PMI) data showed Chinese manufacturing activity, which shrank for a consecutive month till August, as Beijing kept introducing new curbs in response to fresh COVID outbreaks. Towards the end of Q3, the PTA market observed growth, mainly due to the high production rate as the influence of typhoon "Xuan Lannuo," suspending the shipping and delivery of PT.
Due to the easing price pressure on the feedstock Paraxylene, PTA prices in Europe fell throughout Q3. The outlook for the product's demand appeared to be deteriorating; feedstock paraxylene and crude oil prices also contributed to the declining trend as they were falling simultaneously. Additionally, the PTA market gradually oversupplied downstream demand from polyester and PET manufacturers reduced. At the same time, production dropped 1.0% as a result of the rising energy and electricity costs in Europe. Heavy port traffic caused imports and exports in Germany to fall by 0.2% and 0.7% towards the end of the quarter.
