The Asian PTA market (Purified Terephthalic Acid) in China, witnessed a notable price decline in August 2024, despite the challenges posed by Typhoon Gaemi. This downturn was primarily driven by a reduced demand from downstream industries including packaging and textile, supply chain improvements, and lower feedstock costs including Propylene and upstream Crude oil prices.

The downstream packaging industry, a major consumer of PTA, experienced a slowdown in demand, leading to decreased PTA consumption. This sluggishness was exacerbated by the economic uncertainties and subdued consumer sentiment prevailing in the region. As a result, several production units within the packaging sector operated below capacity, further dampening demand for PTA. While Typhoon Gaemi disrupted industrial activities and transportation in the affected areas, the impact on the overall market was mitigated by several counterbalancing factors. Notably, the PTA supply chain showed signs of improvement. Polyester operating rates rose to around 80%, indicating a more abundant supply compared to the previous period of tight supply. This increase in availability helped to alleviate some of the pressure on prices. Despite these favorable developments, the weak demand from the downstream plastic sector continued to weigh on the PTA market. Buyers were reluctant to replenish their inventories at current price levels, leading to a decline in purchasing activity. Some buyers even resorted to importing PTA on breakbulk vessels, bypassing containers, suggesting that they were seeking to build up their inventories.

Additionally, the easing of port congestion led to a decline in freight rates. This reduction in shipping costs made PTA more affordable for buyers, providing a degree of relief. Furthermore, the decreasing prices of crude oil and propylene, key feedstocks for PTA production, contributed to lower production costs for manufacturers. Suppliers, facing a challenging market environment, were forced to adopt a strategy of price reductions to attract buyers. The logistical disruptions caused by the Typhoon further eroded market sentiment and discouraged new purchases. As a result, the market was primarily driven by spot buyers, and new orders were put on hold. Henceforth, compared with July 2024, PTA market prices declined by 6.2% to settle at USD 658/MT, Ex-Qingdao, China on 23rd August 2024. In response to the weak downstream demand, the overall supply of PTA in China continued to outpace demand, further contributing to the price decline. As per ChemAnalyst, the PTA market in China is expected to decline further in September 2024 on the back of a demand reduction and an improvement in supply dynamics.