Isophthalic Acid Prices Remain Stagnant In the US Market Amid Moderate PET Demand

Texas- The prices of Isophthalic Acid in the US market have remained stagnant from the previous week. This comes after a rebound in prices due to moderate demand from Polyethylene Terephthalate (PET) and end-use manufacturing units. The key reason for the continuous number of inquiries faced by the Isophthalic Acid manufacturers in the US market is inclusive of the lack of enthusiasm showcased by the US government and the buyers for implementing and following the complete plastic ban in the domestic market. Online food and beverage services are one of the key buyers of PET-consumed bottles and containers as the sustainability and durability of PET have maintained the demand strength in the US market. Additionally, the production cost of the Isophthalic Acid also depends upon the feedstock (mixed xylene) prices, consequently impacting the overall price dynamics of Isophthalic Acid. Price quotations of Isophthalic Acid on the week ending September 22nd settled at USD 1460 per MT, CFR Texas in the US market.

In the latest developments, crude oil prices have experienced a significant increase. This surge can be attributed to a combination of factors, primarily driven by OPEC+ implementing production cuts, notably spearheaded by Saudi Arabia, which essentially removed 1 million barrels per day from the market. Additionally, Russia imposed a ban on fuel exports. This situation has led to heightened demand for crude oil while concurrently limiting its supply, resulting in an uptick in crude oil prices and contributing to the overall increase in consumer prices. The demand-supply gap was maintained with the domestic traders and retailers for Isophthalic Acid between the US and the Asian countries (China and South Korea), which are the sellers of Isophthalic Acid.

Origin Materials' second large-scale plant is reorganizing the project into two phases, which will result in a delayed startup and a reduction in the size of the plant. This project aims to generate renewable oils that can be further processed into biofuels and feedstock, which can be transformed into a component used in producing PET or Polyethylene Furanoate (PEF). The aftereffects are expected to be showcased for the Isophthalic Acid as the demand may slow slightly.

The market has a growing concern regarding the potential impact of another interest rate hike. Such a move could affect economic growth and the demand for commodities like crude oil. This is because interest rate hikes tend to strengthen the value of the US dollar. A stronger dollar, in turn, makes crude oil more expensive for those who use other currencies. As per ChemAnalyst, the Isophthalic Acid prices are expected to be low in the upcoming quarter as the decline in temperature may slow down the demand for cold beverages, proportionally impacting the Isophthalic Acid prices.