The Asian market witnessed a notable rise in Aramid Fiber prices during the final month of 2024, driven by a combination of supply-demand dynamics and rising production costs. This surge was particularly evident in the Chinese market, where Aramid Fiber META grade prices increased by 0.99% in December. The escalation was supported by a 2.3% rise in the cost of the crucial feedstock, PPD (para-phenylenediamine), along with heightened demand from downstream automotive manufacturing industries and defense firms.

On January 2, 2025, China’s Ministry of Commerce added 28 U.S. entities, including major aerospace and defense firms like Lockheed Martin and General Dynamics, to its export control list. This strategic move, aimed at safeguarding national security, underscores China’s growing emphasis on self-reliance in critical sectors like aerospace and defense. By restricting U.S. firms’ access to Chinese resources, the measures intensify trade tensions and reinforce a tit-for-tat geopolitical dynamic. For U.S. companies, these restrictions pose significant supply chain and operational challenges. Meanwhile, China’s domestic industry, particularly in Aramid Fiber production, stands to benefit as demand rises for advanced materials in defense applications.

Demand from the downstream automotive manufacturing sector also played a significant role in the rising prices of Aramid Fiber. According to the China Passenger Car Association (CPCA), sales of EVs and hybrid passenger cars in China rose by 35% year-on-year, reaching approximately 1.5 million units in December 2024. These gains were bolstered by government trade-in subsidies, fueling demand for Aramid Fiber in automotive applications such as tires, belts, and protective components.

In the Indian market, Aramid Fiber prices also experienced an upward trend, increasing by 2.3% in December 2024. The rise was attributed to limited inventory availability and higher import costs from overseas markets. Additionally, new defense projects announced by the Indian government further contributed to the growing demand for Aramid Fiber. On December 26, 2024, the Ministry of Defense inked contracts for the aircraft and other defense arms with Hindustan Aeronautics Limited and Larsen & Toubro Limited. These developments intensified the need for high-performance materials like Aramid Fiber in the defense sector.

The Indian automotive market also displayed positive demand for Aramid Fiber. Car sales rose for the third consecutive month in December, closing the year at a record 4.3 million vehicles. Wholesales to dealerships increased by 10-12%, reaching 320,000-325,000 units as manufacturers replenished stocks following a robust festive season. This consistent demand from the automotive sector further buoyed Aramid Fiber prices.