Texas, USA:  In February 2024, the Para Phenylene Diamine (PPD) market plunged in South Korea as well as the US. In the South Korean market, the decline in the prices of PPD was attributed to the shrinking demand from the downstream Automotive enterprises and stocked-up inventories among the storage facilities. However, in the US market, the Automotive segment was moving upwards but the inventory levels of PPD were adequate to fulfill the rising demand for the commodity in the market along with the increased rate of consumption.

In the US market, the prices of PPD experienced a decline of 1.53% and settled at USD 3200/MT (CFR-Texas) in February 2024, since the demand was strong from the Automotive sectors, the consumption of existing PPD inventories rose, but the production rate was reduced with the intention of primarily consumption of the existing inventory levels as the commodity was stocked-up. The electric vehicle (EV) market has not met expectations, highlighting a significant gap between anticipated and actual outcomes. Currently, most electric vehicles in the American market are positioned at a higher price range, making them unaffordable for the average consumer and limiting options in terms of body styles. Furthermore, considering the stocked-up inventory levels, the trading activities of PPD from the Chinese market to the US market were slowed down to avoid further potential losses.

In February 2024, the Manufacturing PMI in the US increased compared to January 2024. The latest data indicates a rapid expansion in the country's manufacturing sector, marking the fastest growth since July 2022. Output has seen a substantial increase since May 2022, and the overall surge in new orders is the strongest in 21 months. Additionally, new export orders, which had declined for three consecutive months, have now expanded, reaching their highest rate since May 2022.

At the same time, in the South Korean market, the PPD showcased a decline of 1.90% in February 2024. The significant decline in sales could be attributed primarily to production stoppages at Hyundai, where plant refurbishment and line maintenance activities took place. Additionally, the reduction in working days in February due to the Lunar New Year holidays further contributed to the sharp decline in sales in the automotive sector which resulted in lower demand for PPD. During the initial two months of 2024, sales from domestic manufacturers witnessed an 11% decrease, totaling 202,406 vehicles compared to 226,290 in the same period the previous year. Hyundai's sales volume experienced a notable 16% decline, amounting to 97,463 units, while Kia's sales saw a marginal decrease, reaching 89,100 units. According to an industry insider, there has been a decline in the number of customers visiting showrooms since the second half of 2023. Additionally, the overseas as well as domestic sales for PPD also declined to avoid further accumulation of the inventories. As per Statistics Korea, the Consumer Price Index (CPI) in South Korea increased to 113.77 points in February from 113.15 points in January of 2024 showcasing the increase in the activities of the consumers in the market.

As per ChemAnalyst, the demand for PPD might increase in the upcoming weeks as the existing inventories might be consumed which may result in increased trading activities. Therefore, it is anticipated that the demand for PPD from the downstream Automotive sector might increase resulting in the increased prices of the commodity.