The Polytetrafluoroethylene (PTFE) market experienced a price increase following a period of stability, driven primarily by a surge in trading activities after the Lunar New Year holidays in China. As market activity resumed, Chinese suppliers raised their ex-quotations in response to growing demand in both domestic and international markets. This price adjustment in China, a key PTFE supplier, had a ripple effect on global market sentiments, leading to increased import costs for overseas buyers. Hence, the combination of these factors contributed to the overall upward trend in PTFE prices, impacting international procurement and supply chain dynamics.

During the week ending on February 14, the PTFE market in China experienced a modest price increase of 0.76%, primarily driven by a surge in new orders from the domestic and international automotive sectors. Post-Lunar New Year, market demand for PTFE rebounded as downstream factories actively restocked their inventories, leading to a surge in trading activity. In response, companies gradually raised PTFE prices to align with the growing demand. Additionally, Chinese banks injected a record number of loans to stimulate economic recovery, ensuring liquidity in the market sentiments. These combined factors contributed to the upward trend in PTFE prices.

China’s automobile sales witnessed a 12% year-on-year decline in January, marking the first drop since September and the most significant decline in nearly a year. This downturn was driven by automakers bracing for heightened competition in the world’s largest auto market. Sales of passenger vehicles tend to fluctuate significantly during the first two months of the year, largely due to the shifting timing of the Lunar New Year holidays, which fell in January this year instead of February last year. This seasonal effect, combined with market uncertainties, contributed to the decline in auto sales.

Similarly, in Germany, the PTFE market exhibited an upward trend, primarily driven by increased trading activity from China, which led to a rise in import costs from China to Germany. As Chinese market participants resumed operations post-holiday, the new orders for PTFE improved, reinforcing bullish market sentiment. Despite limited demand from Germany’s downstream automotive sector, PTFE prices experienced a slight increase, largely due to higher import charges. Meanwhile, Germany’s broader economic outlook remained uncertain, with the government lowering its growth projections amid escalating trade tensions and political uncertainties, further shaping market dynamics.

In Germany’s downstream automotive sector, new passenger car registrations declined by 2.8% year-on-year in January 2024, totaling 207,640 units, according to the Germany Federal Motor Vehicle Office (KBA). Compared to the previous month, registrations also experienced a 7.6% decrease, reflecting persistent weakness in the German car market. This downturn is largely attributed to the broader economic slowdown, which has made consumers more cautious about major investments, leading to subdued demand in the automotive sector.

According to ChemAnalyst, PTFE prices are expected to rise as increased trading activity is likely to sustain positive market sentiment, driving further price growth.