China Purified Terephthalic Acid market shows signs of optimism, may turn bearish again in coming weeks

After a dismal H2 of Q4 2021, Purified Terephthalic Acid market has observed bullish rally on the back of healthy demand and strong cost pressure from feedstocks in China. Purified Terephthalic Acid prices fall continually in November and December, however recent optimism has brought reprieve for the market participants. Purified Terephthalic Acid prices have increased by 11.4% since the conclusion of December 2021.

Incessant rise in energy feedstock prices have culminated in strong cost pressure over downstream value chains. Consequently, Paraxylene prices have gained more than 9% in January. This has increased the overall cost pressure over downstream Purified Terephthalic Acid. Thus, Purified Terephthalic Acid prices made a significant climb in recent assessments.

Supply has increased significantly as Fuhaichuang has resumed operations its 4.5 MTPA Purified Terephthalic Acid plant while Zhejiang Yisheng New Materials has started production at its 3.3 MTPA Ningbo plant. Production rates have been robust where several manufacturers reported operating above 75% efficiency.

On demand side, PET consumption has increased ahead of spring season which culminated in robust consumption levels of upstream PTA and optimistic sentiment in the market. However, market has stabilized in last couple of weeks owing to conclusion of buying activities.

As per ChemAnalyst, “Purified Terephthalic acid market is expected to change momentum in coming weeks owing to healthy inventory levels, stable demand and improving production levels. PET market is likely to remain stable in the short term as the spring season holidays reaches its conclusion. PET bottle consumption may witness increase after in the coming months as summer season rolls on and demand of beverages will again climb upwards. Hence, PTA market may observe strong market sentiment in Q2.”