July 2024: PBAT Prices Stabilizes in USA, Rise in Germany Amid Supply and Demand Imbalance

Hamburg (Germany): In the first week of July 2024, the market for Polybutylene Adipate Terephthalate (PBAT) showed contrasting trends between the USA and Germany due to distinct supply and demand dynamics. In the USA, the PBAT market equilibrium was maintained by a balanced supply and moderate demand. Steady domestic production and consistent imports from China, Vietnam, and Europe bolstered supply. Downstream industries, including food packaging and composting bags, maintained steady consumption levels, resulting in consistent demand without significant spikes. Consequently, PBAT prices in the USA remained stable.

Conversely, in Germany, PBAT prices increased by 1.4% during the week of July 5th, 2024, driven by several supply-side factors and seasonal demand fluctuations. Local manufacturers and distributors depleted their PBAT inventories in anticipation of higher summer demand, leading to increased reliance on spot purchases, which pushed prices up. Additionally, a temporary reduction in PBAT imports from other European countries further constrained supply. Despite stable prices for key raw materials like adipic acid and a slight decline in butanediol prices, a 1.2% increase in purified terephthalic acid costs contributed to higher production costs. These factors, combined with steady demand in packaging and a seasonal uptick in biodegradable bags and mulch films, led to an increase in PBAT prices in Germany. By the end of the first week of July 2024, PBAT prices stood at USD 1996/MT, CFR Los Angeles, in the USA and USD 2080/MT, FOB Hamburg, in Germany.

Despite July typically not being a peak season, a slight seasonal uptick in specific downstream applications, such as biodegradable bags and mulch films was observed, optimized supplies also contributed to the price increase. Packaging demand remained steady, while agricultural demand for mulch films was subdued due to the off-peak planting season.

The contrasting trends in PBAT prices between the USA and Germany during the first week of July 2024 highlight the complexities of regional market dynamics. In the USA, stable prices resulted from balanced supply and moderate demand, supported by steady domestic production and imports. In Germany, depleted inventories, seasonal demand fluctuations, and supply constraints led to an increase in PBAT prices.

Looking ahead, PBAT prices are expected to continue varying due to regional factors. In the USA, persistent demand in the packaging sector driven by regulations and eco-friendly consumer preferences could support price stability or potential increases. In Germany, demand influenced by seasonal trends and sustainable packaging regulations, along with potential fluctuations in raw material costs, could lead to price hikes or stabilization. Overall, the PBAT market will be shaped by supply and demand factors, regulatory influences, and broader economic conditions, with regional variations significantly impacting price dynamics.