Chinese PTMEG Prices Sustains Stability January 2024 Despite Undergoing Uncertainties

In January 2024, the Polytetramethylene Ether Glycol (PTMEG) market in China demonstrated a consistent and steady movement, largely influenced by stable demand dynamics in various industrial sectors. The feedstock Tetrahydrofuran (THF) played a pivotal role in influencing market movement. Initially experiencing a decline in prices, THF later stabilized after the first two weeks, contributing to the overall stability in the PTMEG sector. The demand for PTMEG in the downstream textile industry remained subdued, resulting in a balanced market as inquiries dwindled. Concurrently, the demand for PTMEG saw an uptick in the paint and coating industries, particularly in the automotive sector, where China has solidified its position as a major vehicle exporter. During the pre-Lunar New Year period, the petrochemical markets in Asia exhibited a mixed trend. Some products’ prices experienced an increase, driven by pre-holiday restocking and supply constraints, despite an overall weakness in underlying demand. Notably, concerns over limited vessel space and higher freight costs triggered a spike in demand, particularly in northeast and southeast Asia, leading to delays in cargo deliveries amid ongoing logistics issues in the Red Sea.

The looming Lunar New Year cast its shadow over China's PTMEG market, contributing to the early closures of downstream textile factories. This, coupled with diminished demand from Europe in the textile industries, resulted in a double impact on both domestic and global demand, leading to a mild downturn in PTMEG prices. The global textile and garment industries faced challenges as major consumer markets like Europe significantly reduced imports of clothing items due to historic inflationary pressures. In contrast, the automotive sector showcased resilience, with an increased demand for paint and coating products. Chinese-brand passenger vehicle sales surged by 24.1% year-on-year, reaching 14.6 million units, contributing to an overall growth in auto sales, surpassing 30.09 million units. New energy vehicle sales also witnessed a remarkable surge of 37.9% year-on-year, exceeding 9.49 million units. Amid geopolitical uncertainties related to the Ukraine invasion, China strategically filled the void left by global manufacturers withdrawing from Russia, maintaining business relations and fostering growth in car sales.

While the Lunar New Year holidays are arriving, factories are anticipated to resume operations after the festivities. According to ChemAnalyst, PTMEG prices in the Chinese market are projected to move gradually and steadily in Q1 of 2024, in support of expected improvement in productivity rates and a moderate demand outlook. The multifaceted landscape of the PTMEG market in China underscores the resilience and adaptability of the industry amid dynamic global factors.