Improved Supply Fundamentals Result in Steep Decline in US Purified Terephthalic Acid Prices

Purified Terephthalic Acid (PTA) prices have measured a substantial drop in last week’s price assessments across USA. Strengthen supply dynamics and stable demand fundamentals have pressured market participants to weaken the prices of the available material.

Purified Terephthalic Acid prices have fallen by more than 5% during 3^rd week of January 2022. USA depends largely on Mexican PTA exports to fulfil its domestic demand. Consequently, rise in imports of Purified Terephthalic Acid from Mexico along with increased domestic production have resulted in enhanced PTA supply in North America. In Q3 and H1 of Q4, production of PTA remained mostly hampered in Mexico and in lieu of that key Mexican producer announced force majeure on the available material which further constrained US PTA supply. However, production rates improved in Mexico and producer lifted FM over PTA which brought increased PTA supplies on US shores.

On Demand side, PTA forms critical complement of PET (Polyethylene Terephthalate) value chain and Polyester value chain. Consumption from downstream PET bottles has been stable while Polyester Staple Fibre (PSF) have increased PTA volume intakes. Earlier in Q4, snug supply of PTA caused DAK Americas to announce force majeure on downstream PET at its Mississippi plant.

As per ChemAnalyst, “Purified Terephthalic Acid prices are likely to follow a downward trend in the coming weeks as supply fundamentals are expected to improve further. PTA demand is likely to remain stable from PET bottle in the short-term, however PET bottle demand, traditionally, accelerates from Q2 onwards. Consequently, demand surge from PET may spur bullish sentiment in upstream PTA market as well in coming months. Polyester production has been healthy and consumption of Monoethylene Glycol (MEG) and Purified terephthalic Acid remain stable and similar trend is likely to be continue in the coming weeks.”