Global PTMEG Prices Under Pressure Amidst Weak Downstream Demand and Oversupply

During mid-November 2024, PTMEG prices faced global pressure due to weak demand from downstream spandex and polyurethane industries, coupled with subdued cost support from tetrahydrofuran. This downturn was observed across major regions as bearish market sentiment, oversupply, and declining operating rates intensified market challenges.

In China, PTMEG prices continued their downward trajectory for the sixth consecutive month, driven by sluggish demand from downstream polyurethane and spandex sectors. Manufacturers like Dairen Chemical Corporation and Henan Coal Chemical Industry Group resumed operations, exacerbating the oversupply scenario of PTMEG. In recent times, operating rates dropped to approximately 70% as producers sought to manage inventory and mitigate losses.

Broader economic factors in China also weighed on the market, with profits in the chemical raw materials and products manufacturing sector declining by 4% year-on-year during the first nine months of 2024. Total industrial profits in China decreased by 3.5% during the same period, underscoring challenges within the sector.  Typhoon-related disruptions in September delayed some shipments, temporarily boosting October exports, but this provided little relief to overall market conditions.

Similarly, South Korea experienced persistent declines in PTMEG prices, attributed to lackluster demand and oversupply. Downstream sectors like polyurethane and spandex remained under pressure due to cautious procurement and elevated inventory levels. Export growth from South Korea hit a seven-month low in October 2024, reflecting broader economic uncertainties and further contributing to the market's bearish tone.

In Europe, PTMEG prices mirrored global trends, remaining under pressure due to subdued demand and persistent oversupply, which impeded market recovery. Operating rates in the region stayed at reduced levels, with some facilities cutting capacity to manage high inventory levels. Weak downstream activity in key sectors like polyurethane and spandex added to the market's challenges for PTMEG. European Union data revealed a 3.63% decline in apparel imports during the first eight months of 2024, underscoring reduced demand in the textile industry—a significant consumer of PTMEG.

In the USA, the PTMEG market remained subdued due to weak demand from downstream polyurethane and spandex sectors. Producers continued to adjust operating rates, maintaining lower capacities to manage high inventory levels. Within Dow’s Industrial Intermediates & Infrastructure segment, which includes the polyurethane business, Q3 2024 net sales stood at USD 3 billion—a 2.4% year-on-year decline—underscoring the persistent demand challenges in the polyurethane market.

Across regions, the textile industry, a critical end-user of PTMEG, grappled with oversupply and cautious procurement. The global apparel sector faced declining imports and exports, signaling restrained activity. As market sentiment remains bearish, PTMEG prices are expected to remain under pressure unless demand in key downstream sectors shows meaningful recovery.