US PTA Price Slumps in October 2024 Despite High Trading Activity

The Purified Terephthalic Acid (PTA) market in the USA experienced a sharp decline in prices during October 2024, despite a generally buoyant trading environment. The decline in PTA prices during October 2024 was not driven by a decrease in orders but rather by increased supply. Manufacturers, faced with ample inventory, offered significant promotional discounts to stimulate demand. This competitive pricing environment led to lower quoted prices, contributing to the overall price decline of PTA. Despite potential supply chain disruptions due to hurricanes and port strikes, the underlying fundamentals of oversupply and aggressive discounting continue to weigh on the market.

During October 2024, a significant factor driving the price decline was the ample supply of PTA as an oversupply situation weighs on the market fundamentals. Several PTA plants were operating at reduced rates, but the overall supply remained robust due to the availability of abundant inventory and aggressive discounting by manufacturers to stimulate sales. Moreover, the return of some production units to operation further exacerbated the oversupply situation. Furthermore, weak demand from the downstream plastic sector erodes market sentiments during this timeframe as the softening demand from the downstream plastic industry also played a crucial role in the price decline. Many buyers in the region were well-stocked and exhibited little urgency to replenish their inventories, leading to subdued trade discussions. While there were expectations for a rebound in demand from the textile industry, economic headwinds and persistent oversupply continued to dampen market sentiment to settle the prices at USD 1302/MT, PTA FOB, Charleston, USA at a monthly decline of 6.3% during October 2024.

Additionally, strategic discounting and an inventory build-up further supported the downtrend. Manufacturers resorted to strategic discounting to entice buyers and clear excess inventory. Traders, anticipating further price declines in the fourth quarter, actively sold off their warehoused stocks, further adding to the downward pressure on prices. Additionally, the build-up of inventories in both domestic and export markets, due to poor demand from the downstream plastic industry, overshadowed any potential seasonal recovery. While hurricanes and port strikes disrupted the supply chain, their impact was mitigated by other factors. The decline in feedstock propylene prices and the promotional discounts offered by manufacturers offset any potential upward pressure on PTA prices during this timeframe.

As per ChemAnalyst, the PTA prices in the US market are expected to further decline in November 2024 due to oversupply dynamics. As long as these factors persist, the outlook for PTA prices remains bearish.