Sluggish Downstream Demand Slumps PAM Prices in the European and the US Markets

Texas, USA: The Polyacrylamide (PAM) market continued to showcase a downward trend in both US and European markets throughout the month of June 2023. The PAM Anionic grade price fell by approximately (2.8%) and (1.8%) in the German and US market, respectively. This weak PAM market sentiment was observed on account of lower consumption rates from the downstream Paper and Mining industries. However, Inventory levels in the region were reasonable, and the entire supply chain was running smoothly, which prompted market participants to keep the prices softer.

In the US market, the demand outlook of PAM from the downstream Paper and Mining industries is still doubtful, and there has been no sign of expanding demand in the current consequence, as frequent influxes of material lead to overflow of consequences in domestic ports. Additionally, easy access to base materials, low employment costs, and deteriorating Natural Gas prices lower the production costs of PAM in the region. This manipulated market participants from other European and Asian regions to offer lower bidding for the PAM. However, the plants were operating at slower rates, but the sellers were still observed to provide discounts on the product to increase market transactions.

In the German market, the Manufacturing Purchasing Managers' Index (PMI) remained at its lower end in the past few months. Additionally, the plants were operating at normal rates in the domestic region. Meanwhile, the market fundamentals remain bearish; despite efforts to manage the supply-demand balance by cutting production rates, significant traders are undergoing a tempering trend. However, the spot market faced challenges across the month as providers continued to receive inquiries about the product with enough stocks. Additionally, Imports of PAM from other North American and Asian regions also dropped as enterprises did not show any interest in bulk purchasing; instead, market participant procured their stocks on an immediate basis which consequently showcased a slump in trading activities for PAM.

As per ChemAnalyst, the price for PAM in the European and US market may remain challenging in the forthcoming months. Since the demand outlook is still uncertain, there has been no suggestion of rising demand from the major connected downstream Paper and Mining industries. As inventory levels in the region were found to be satisfactory, and the entire supply chain was running smoothly furthermore, participants in the market reported that there were no issues with product supply during the specified time. Furthermore, slow economic conditions might manipulate the market dynamics of PAM.