Stable PTFE Prices Persist Amid Declining Downstream Demand and Shifting trading fundamentals

The global trend for Fluoropolymers (PTFE) prices remained stable overall. The early occurrence of Easter contributed to a diversification of spending patterns, leading to lower demand. Coupled with ample supplies in the market, these factors ensured that prices for PTFE were unaffected by any potential supply disruptions. This stability in the market reflects how external events like holiday timings can influence consumer spending and demand, impacting global commodity prices in subtle but significant ways.

Last week, the price of PTFE remained stable in Germany, largely because of an ample supply from the Asian market, which satisfied current demands without causing significant price fluctuations. In the European Union, new car sales saw a decline, partly due to an earlier Easter, which typically shifts consumer spending patterns. Additionally, car registrations dropped, and the growth in sales of electric vehicles (EVs) also slowed. The slowdown in the automotive industry was further exacerbated by an investment in capacity and technology development that, to some extent, had outrun demand. Consumer and industry purchasing enthusiasm in the domestic market was described as average, reflecting a cautious approach amid changing financial conditions. During the week of April 19, 2024, amidst these varying market conditions, the cost of PTFE held steady at USD 13920/MT on a CFR Hamburg basis.

Globally, as demand began to recover in various consumer sectors, China's long-standing issue of manufacturing overcapacity appeared to have reached its peak. This scenario was set against a backdrop where Chinese companies' increasing competitiveness may continue to fuel trade tensions. Last week, the price of PTFE experienced a marked decline, largely due to a downturn in performance from downstream automotive industries. Industry observers agreed that the worst of China’s excess industrial capacity had passed. However, a slowdown in investment from firms experiencing lower profitability was expected to lead to slower growth in capacity. Specifically, the automobile manufacturing industry in China remained stagnant last week, characterized by low trading activities. This stagnation signalled a reduced consumption of PTFE in the market, directly impacting the polymer's demand. Additionally, procurement sentiments had also weakened.

In the United States, the price of PTFE showed a stable trend last week. This stability in pricing dynamics was attributed to several factors affecting demand and supply within the construction and automotive sectors. In the construction industry, the demand for PTFE had not increased as the market was still utilizing existing inventories. As companies continued to work through the stocks they already had, the immediate need for additional PTFE diminished, influencing the overall demand and pricing of the material. Simultaneously, the automotive industry experienced an increase in new-vehicle inventories while sales remained steady. This balance between supply and demand in the automotive sector typically resulted in reduced urgency for additional production materials, including PTFE, which is used in various automotive components. The steadiness of sales, paired with growing inventories, suggested that there was less pressure to ramp up production, which in turn affected the demand for manufacturing inputs like PTFE.

According to ChemAnalyst, there is an expectation that global PTFE prices may see an increase in the upcoming weeks. This anticipated rise is partly attributed to the normalization of spending patterns following an early Easter, which had previously led to diversified spending and temporarily subdued demand. As market conditions stabilize post-holiday, demand for PTFE is likely to increase, potentially driving up prices. Additionally, the ongoing military conflicts between Israel and Iran are contributing to potential supply disruptions. These conflicts are expected to affect freight charges, as heightened geopolitical tensions can lead to increased shipping costs and logistics complexities. Such disruptions in the supply chain are likely to exert further upward pressure on PTFE prices globally.