China’s Purified Terephthalic Acid market at standstill amid escalating cost pressure and declining demand
- 22-Apr-2022 12:08 PM
- Journalist: Li Hua
The Purified Terephthalic Acid market rebounded this week with an increment of 0.63% in China . WTI crude oil prices have been rising along with tighter supply as a result of sanctions imposed on Russia, the world's second-largest oil exporter. Therefore, with increasing raw material prices, the global PTA market has also risen. As of April 19, the price for PTA in east China was USD 975/ton.
Purified Terephthalic Acid makes polyester coatings resins, including fibers, yarns, films, plasticizers, and PET bottles. The demand for PTA is higher in the packaging sector, including the packaging of food, beverages, and pharmaceuticals. In India, the market for PTA is driven by the polyester sector, as Asia accounts for the highest polyester demand compared to other countries. In Addition, the emerging growth in the packaging sector due to advancements in E-commerce has also added to the flourishing market trend of PTA.
The PTA market in China, on the other hand, follows the fluctuating crude oil trend which rose and settled at WTI Crude USD 107.9/b on April 19. Apart from that, port congestion at Shanghai and Ningbo has been growing since the extension of lockdown, impacting the supply of vessels outside Chinese ports. Meanwhile, the demand from the downstream polyester market followed the rising cost of raw material PTA leading to drop-in operating rate. Therefore, due to the start-up load, the manufacturer in Jiangsu and Zhejiang cut down their operational load leading to a drop in supply for PTA by 77%.
In addition, three large refiners, China National Offshore Oil Corporation (CNOOC), Sinopec, and Sinochem in China, have announced to stop buying Russian crude, which may affect the domestic production of PTA, creating pressure on the downstream industries.
As per the ChemAnalyst database, "the demand for Purified Terephthalic Acid is anticipated to boost in Asia-Pacific region along with the higher orders from downstream Polyethylene Terephthalate bottle and packaging Industry."
