Bullishness in the Global 6-PPD Market Prompts the Price Hike in November 2023

Busan, South Korea- In November 2023, the 6-Para-Phenylene Diamine (6-PPD) showcased a bullish price trend due to an elevation in its purchases from the suppliers across the globe. Nevertheless, the producers had raised their quotations for the domestic and overseas markets amid crippling product availability. On the other hand, the cost support from its feedstock market was limited as Aniline experienced a downward price trend, but the rise in the product consumption from Dyes Intermediate remains the primary reason for which the producers have maintained their prices on the higher end. The bullish market trend for 6-PPD allowed the producers to improve their profit margins along with sales, providing further growth in the price trajectory.

In the USA market, the prices of 6-PPD showcased an inclination in its trend due to higher product purchases and further growth in demand from the Dyes and Cosmetic enterprises. While focusing on the upstream sector, the prices of Aniline showcased a downward price correction, whereas Nitrobenzene, which is used in the intermediate process, witnessed market growth. Since the demand for 6-PPD surged, the producers decided to enhance their production rate so that the needs of the downstream Dyes and Cosmetic enterprises could be met.

The consumption of the existing inventories in the storage facilities was exhausted at a higher rate, which led to the requirement for restocking. Therefore, the trading activities from China to the USA also enhanced so that there is sufficient inventory for the downstream Dyes and Cosmetic enterprises. This unfavorable market situation obliged the buyers to purchase 6-PPD to fulfill the demand from the domestic market. The spread between 6-PPD and its feedstocks, namely, amine and Nitrobenzene, widens, indicating the market's bullishness. An increase in the demand from the other importing nations, namely India, led to the tightening of supplies in China.

The market price of 6-PPD in South Korea experienced an upward trend and settled at USD 2943/MT (FOB-Busan). The supplies of 6-PPD were slow since demand was strong for the domestic markets and the Indian shipments, along with the growing interest in acquiring new stocks. 6-PPD producers saw improved profit margins and revenue because of the robust purchases by downstream Dyes and Cosmetic sectors. Furthermore, exports of 6-PPD to India increased significantly, and market conditions remained strong with elevated trading fundamentals. The demand from the downstream Dyes and Cosmetic market enhanced, obliging the producers to elevate their production rates for the 6-PPD. The buyers had to purchase the commodities at elevated prices to stock the storage units to meet the demand from the domestic market.

According to ChemAnalayst, the prices of 6-PPD are anticipated to decline in the upcoming weeks as, with the year's end, the distributors might try to sell their existing inventories with negotiable discounts. It is also anticipated that the suppliers may try to sell the commodity at a lower rate, and buyers may remain hesitant to pay higher, which can create a dilemma in the market situation. Exports from China and South Korea to the overseas market may decline due to the comfortable supplies, which can disrupt the supply/demand equilibrium.