In March, Treated Distillate Aromatic Extract (TDAE) prices remained stable in both Malaysia and India, supported by balanced supply-demand dynamics, despite some external pressures and logistical challenges.

In Malaysia's case, steady TDAE prices reflect consistent production costs, resulting from lower upstream crude oil prices. While moderation in manufacturing output and demand from downstream sectors created less activity in the marketplace, particularly during Ramadan, inventory levels and purchasing activity were sustainable given the overall supply-demand balance. Moderate activity in conjunction with stable supply conditions and cautious demand ensured that price stability remained consistent relative to seasonal and economic variables. Despite some inefficiencies in the logistics, these variables contributed to preserving TDAE price stability through the entire month.

Demand for TDAE in Malaysia could be characterized as mixed. Demand in the automotive and industrial sectors was stable. However, the overall demand for TDAE was limited by a slowdown in the manufacturing sector, which limited new orders. A main consumer, the rubber industry, also faced lower activity and limited any growth in demand. Supply chain pressures and uncertainties, including risks in the global geopolitical arena and trade disagreements, kept buyers cautious.

The TDAE market in India also enjoyed price stability, despite facing pressures from outside factors, especially because of potential supply disruption during Ramadan. Since Indian manufacturers were aware of the risks, they took precautionary measures into consideration and stockpiled TDAE ahead of time for an ample supply despite the outside factors. The stockpiled material helped in nullifying logistical challenges due to berth congestion at Port Klang and rising import costs.

In India, demand for TDAE remained moderate, which is driven by consistent growth in the original equipment manufacturer (OEM) space based on passenger vehicles and two-wheelers, along with steady replacement demand that comprises the bulk of the industry's volume. On the downside, the demand coming from commercial vehicle space was relatively muted from a growth perspective due to a temporary halt in infrastructure activities, and the high base effect also played a role. Demand in the rubber industry also deteriorated in the month of March.

Overall, stable TDAE pricing in both India and Malaysia in March was a reflection of the market being cautiously optimistic moving forward. This has stemmed from prudently stockpiling, ongoing demand from the key industries, and reducing some of the logistical issues.

As per ChemAnalyst, geopolitical uncertainties and fluctuating crude oil prices could introduce some volatility in the TDAE market, warranting cautious market sentiment in the coming months.