PPD Market Surges Amidst Global Demand and Trade Tensions

Busan, South Korea: During the fourth month of 2024, the Para Phenylene Diamine (PPD) market in the APAC region as well as in North America followed an upward price trend. The bullishness in the market scenario was due to the surge in the demand for PPD from the downstream Automotive and Textile sectors along with the economic fluctuations and therefore the supply chain of PPD was hampered which disturbed the equilibrium between supply and demand.

In the APAC region, in April 2024, China and South Korea witnessed an incline in their trend due to the heightened demand for PPD from the domestic as well as the overseas downstream Automotive and Textile sectors. In the Chinese market, existing inventories of PPD were depleted quickly, leading to a shortage in supply. Production rates of PPD were boosted to compensate, but during the Qing Ming festival from April 4th to 6th, the market closed for three days, pausing operations as market players took part in the festivities. This disruption affected the supply chain of PPD for both domestic and international Automotive and Textile sectors. However, trading activities for PPD picked up after the festival, prompting market traders to increase their prices of PPD to bolster profits. According to the International Energy Agency (IEA), Chinese EVs already account for 60% of global sales.

Similarly, the South Korean PPD market experienced a bullish trend during the month and settled at USD 3570/MT (FOB-Busan) in April 2024, due to insufficient inventory levels to meet the growing demand from the Automotive and Textile sectors downstream. With demand for PPD on the rise, domestic production surged by 3.5% to reach 394,457 units. However, local sales experienced a 5.5% decline during this period, totaling 141,110 units. Despite a weak Textile sector in April 2024, the robust Automotive sector drove up the demand for PPD. Luxury car sales in South Korea took a hit following the government's implementation of regulations mandating neon green license plates for company cars valued above USD 58,000, aimed at curbing tax evasion.

On the export front, South Korea saw a 10.3% increase in auto exports in April compared to the previous year, driven by strong demand for eco-friendly vehicles from North America. In April, North America emerged as the primary export market for South Korean cars, witnessing a significant surge in sales by 36.6% year-on-year to reach USD 4 billion. However, shipments to the European Union declined by 25.3% to USD 753 million, and those to Asian countries decreased by 15% to USD 443 million.

Also, the Trade of PPD between China and the US faced obstacles as President Joe Biden was urged to ban imports of Chinese-made electric cars due to national security concerns. However, the actual number of Chinese cars on US roads remains minimal, largely because of the 27.5% tariff imposed on these vehicles. Meanwhile, in the Textile sector, the US government implemented higher tariffs on apparel imports from Bangladesh and four other countries to curb imports from those regions. However, US trade bodies oppose this move, arguing that it ultimately burdens end-consumers with additional costs. According to the Xenata Shipping Index, freight charges from Far-East Asia to North America decreased by 5.12%, indicating a decline in transportation costs.

In April, US automaker Tesla sold 62,167 electric vehicles manufactured in China, marking an 18% decrease compared to the previous year, according to data from the China Passenger Car Association (CPCA). This figure contrasts with the broader market's growth. Overall, due to restricted imports from other countries by the US government and high demand, commodity prices increased due to lower supplies.

As per ChemAnalyst, the PPD market is expected to grow in the upcoming weeks due to the surge in demand. The US PPD market might face a supply shortage due to the lower imports from China which might affect the Chinese market and might move toward a bearish market scenario. However, the South Korean PPD market may continue to follow an upward trend for PPD due to the increased demand from the domestic as well as the overseas markets.