US and Chinese PPD Markets Experienced an Upward Trend Amid Mixed Downstream Demand

Qingdao, China: In September 2024, the US and China markets for Para-Phenylene Diamine (PPD) witnessed an upward trend, driven by an increase in production costs. Regarding feedstocks, Aniline prices rose while Nitrobenzene remained stable. Additionally, heightened demand for PPD from the downstream Automotive and Pharmaceutical sectors further influenced the price trend of PPD.

In September 2024, the PPD market in China experienced a 2.66% increase, reaching USD 2700/MT (FOB-Qingdao). The downstream sectors displayed a mixed performance, with the Pharmaceutical sector showing a downward trend that could have pressured the market downward. However, strong demand from the Automotive sector uplifted market sentiment for PPD. According to the China Association of Automobile Manufacturers (CAAM), domestic automobile sales in China reached 2.27 million units in September, marking a 16.9% increase from the previous month but a 6% decline compared to the previous year. Automobile exports stood at 539,000 units, up 5.4% month-on-month and 21.4% year-on-year. Notably, the domestic sales of New Energy Vehicles (NEVs) surged to 1.176 million units, reflecting an 18.8% monthly increase and a significant 45.5% growth from the previous year, with NEVs accounting for 51.8% of total domestic automobile sales. This growth in the automotive sector, particularly NEVs, supported the rising demand for PPD, counteracting the decline in the pharmaceutical sector.

Additionally, China exported 105,000 New Energy Vehicles (NEVs) in September, a 19.3% year-on-year increase and a 6.0% rise compared to the previous month, representing 24% of the total vehicle exports (539,000 units) for that month. Over the first nine months of 2024, China exported 4.312 million vehicles, including 968,000 NEVs, reflecting a 30.2% increase year-on-year. As a result, both domestic and international demand for PPD experienced a boost, driven by growth in the downstream Automotive and Pharmaceutical sectors.

In September 2024, the US PPD market experienced an upward trend, largely due to the increased import costs from China, reflecting the price movements of the exporting nation. This rise was further exacerbated by supply chain disruptions caused by the ongoing hurricane season in the US. The performance of PPD's downstream sectors was mixed. The automotive sector experienced a notable decline, with vehicle sales dropping to 1,172,101 units, a 12.3% decrease compared to September 2023, partly due to fewer business days—23 days of sales, two fewer than the previous year. However, the pharmaceutical sector experienced growth, which increased the demand for PPD and supported positive market sentiment. Additionally, the widening price spread between Aniline, Nitrobenzene, and PPD signaled a bullish market, further lifting PPD prices in September 2024.

According to ChemAnalyst, the PPD market in both China and the US is expected to experience an upward trend, driven by potential supply chain disruptions during China's Golden Week holidays. The holiday period may lead to reduced production and delayed shipments, tightening the supply of PPD and contributing to a rise in prices over the coming weeks.