Despite Weakening Consumption, Isophthalic Acid Market Sustains Price Rollover in US and China
- 10-Oct-2024 2:30 AM
- Journalist: Motoki Sasaki
The price of Isophthalic Acid in both the Chinese and US domestic markets remained unchanged during the week ending October 4th, 2024. Despite rising crude oil prices due to geopolitical tensions in the Middle East, the lack of robust demand from downstream sectors like PET resin and its derivatives has prevented significant price fluctuations in Isophthalic Acid pricing.
Market participants were adopting a cautious stance, with reduced inquiries from both domestic and international markets. The end customers were becoming more hesitant to make purchases, leading to a decline in new order demand for Isophthalic Acid. As a result, manufacturers have refrained from adjusting their pricing, further stabilizing the domestic market.
On the downstream sector perspective, in September, the price of downstream PET declined by around 6.7% in the domestic market of China. The decline in prices can be attributed to the decrease in feedstock prices and weak demand. The supply side of the market has expanded with the production of Xingye Plastics' 750,000 ton/year project and Yizheng Petrochemical's 500,000 ton/year project. Three sets of previously under-maintained equipment have also restarted. PET supply has increased significantly in September. However, high summer temperatures and student holidays have reduced travel activities, affecting the consumption of terminal soft drinks and catering industries, and reducing demand for PET materials. The market for polyester bottle chips has been under increasing downward pressure due to this negative outlook, which has also affected the market for Isophthalic Acid.
On the upstream front, crude oil prices have risen this week due to growing concerns about the possible disruption of global petroleum supplies caused by intensifying regional violence in the Middle East. Futures for Brent crude ended the day up USD 3.72, or 5.03%, at USD 77.62 per barrel. USD 73.71 was the closing price for US West Texas Intermediate (WTI) oil futures, up USD 3.61 or 5.15%.
Despite rising crude oil prices due to geopolitical tensions in the Middle East, the lack of robust demand from downstream sectors like PET resin and its derivatives has prevented significant price fluctuations in Isophthalic Acid pricing. The rise in crude oil prices has added to the overall uncertainty in the market. However, the impact on Isophthalic Acid prices has been limited due to the prevailing weak demand conditions.
In the USA too, the price for Isophthalic Acid remained unchanged. The steady supply of Isophthalic Acid in the domestic market was evidence of a well-run supply chain that has successfully satisfied domestic companies' needs without causing major disruptions. The main force behind market activity has been demand, suggesting that supply has kept up with the needs of downstream industries such as PET resin and its derivatives. This equilibrium has averted significant price swings and added to the general stability of the Isophthalic Acid market. Hence, the prices of Isophthalic Acid CFR Texas were settled at USD 1340/MT in the week ending 4th October.
As per ChemAnalyst Pricing intelligence, the prices of Isophthalic Acid are expected to decline in both the USA and China. In China, purchases might not pick up until the middle of the month due to the Golden Week holidays. This month may not see an improvement in domestic demand for Isophthalic Acid. International purchases could continue to be modest, particularly from North America and Europe.
