Global Downtrend Continues: PTMEG Market Faces Persistent Weak Demand and Oversupply

In the first week of September 2024, the PTMEG market continued to experience downward pressure, extending the trend of declining prices seen throughout the prior months. Globally, PTMEG prices have been on a decline, with the weakness in demand from downstream industries, particularly textiles and spandex, contributing to the market's stagnation.

In China, the market remains under considerable pressure due to sluggish demand in the spandex and textile sectors, which has been exacerbated by the off-season effect. Weak procurement activities were primarily driven by rigid demand, as manufacturers continued to adopt a cautious approach amid bearish market sentiment. Despite the market being temporarily stable in regions such as Fujian Province, where spandex demand held steady, overall market activity in China remained subdued. The PTMEG industry operated at low capacity, and supply continued to outstrip demand, placing further downward pressure on prices. Additionally, the oversupply situation persisted, driven by earlier expansions in production capacity, such as those from Hengli Petrochemical and Junzheng Chemical, which have left the market with excess inventory and limited room for price recovery.

India’s PTMEG market reflected similar dynamics, as the textile and spandex sectors also struggled to rebound. Market participants in India noted a lack of significant improvement in demand, with purchasing activities remaining cautious. Indian manufacturers faced pricing challenges due to increased competition from imports, further complicating the balance of supply and demand. With the market grappling with oversupply, PTMEG prices in India mirrored the broader global trend, remaining stagnant and showing little sign of upward movement.

In Europe, the PTMEG market was equally impacted by weak demand and subdued market sentiment. The European PTMEG market saw limited activity throughout the holiday season in August, which contributed to the muted demand. Spandex demand remained weak, with most buyers adopting a wait-and-see approach, causing market momentum to falter. Furthermore, the textile industry in Europe has been facing its own challenges, including sluggish consumer demand and heightened competition from Asian imports, both of which have kept prices under pressure.

Upstream factors also failed to support the market. The cost of feedstock tetrahydrofuran, a critical component in PTMEG production, remained low, providing little to no relief to manufacturers. Meanwhile, crude oil prices, despite some temporary fluctuations due to geopolitical tensions in the Middle East, remained under pressure due to weak global fuel demand, particularly from China and Europe. The anticipation of OPEC+ easing output cuts in October has also added to the downward momentum in crude prices, further limiting any cost support for PTMEG.

Looking ahead, the PTMEG market faces ongoing challenges in balancing supply with demand. The expected addition of around 166,000 tons/year in production capacity in China during the second half of 2024 will likely exacerbate the supply glut, leaving little room for price recovery in the near term.