Busan, South Korea: In November 2024, the Para-Phenylene Diamine (PPD) market in both North America and Asia maintained a bearish trend. This persistent bearishness was primarily due to a notable decrease in production costs of PPD and reduced demand from downstream Automotive and Tire sectors.

In November 2024, the Para-Phenylene Diamine (PPD) market in South Korea experienced a 5% decline. This bearish trend was driven by a significant decrease in production costs, with Nitrobenzene prices falling by 11% and Aniline by 10.6%. Despite previous signs of stabilization in the downstream automotive sector, the market resumed its downward trajectory due to sluggish demand from heavily indebted consumers. Sufficient existing inventory levels of PPD met the subdued demand from the downstream sector, leading to a decline in new orders for PPD and further dampening market sentiments. Concerns about economic conditions also weighed on the market, as evidenced by the Bank of Korea's Business Confidence index falling to 68 from 69. Consequently, market players lowered their ex-quotations of PPD. The downstream automotive sector showed limited demand for PPD, resulting in cautious procurement activities. In November, the five major Korean automakers reported a combined sales total of 123,616 units, reflecting a 6.4% decrease from the previous month and a slight 0.2% decrease from a year ago. Over the first eleven months of the year, domestic vehicle sales fell by over 7% to 1,243,400 units from 1,338,243 units a year earlier.

Additionally, in November 2024, the central bank unexpectedly reduced its benchmark interest rate by 25 basis points for the second consecutive month, bringing it down to 3.0%. This move aimed to stimulate private consumption in response to a slowdown in GDP growth, which decelerated to 1.5% year-on-year in the third quarter from 2.3% in the second quarter. In reaction to these economic shifts, local automakers intensified their promotional campaigns in a bid to achieve their full-year sales targets, adapting their strategies to the evolving market conditions and consumer behavior amidst the changing economic landscape.

Similarly, the Para-Phenylene Diamine (PPD) market in the US, in November continued to exhibit a bearish trend, primarily due to declining import costs from South Korea and year-end destocking efforts by domestic market participants, which further suppressed demand for PPD. Despite some improvement in the downstream Automotive sector, high inventory levels prevented a significant boost in market sentiment. The number of new vehicles sold in the US rose to 1,363,968 units, a 9.8% increase from the previous year and a 2.76% month-on-month rise. However, this did not translate into higher PPD demand due to the existing high inventory levels in the automotive segment, which continued to push prices downward. Total automotive inventory increased from 3.04 million vehicles at the end of October to 3.19 million by mid-November. Additionally, Donald Trump's victory in the 2024 presidential election impacted market sentiment, with his policies on deregulation and domestic production leading to lower commodity prices amid weaker economic growth. This combination of reduced feedstock costs, cautious market behavior, economic uncertainties, and destocking pressures maintained the bearish sentiment in the US PPD market.

As per ChemAnalyst, the PPD market is anticipated to continue with the bearish market sentiments of the commodity as the market participants are expected to maintain their destocking activities as the year-end approaches this might result in the bearish market sentiments of the PPD.