Weak Demand From Spandex Governs PTMEG Prices in Europe

Germany- PTMEG price dynamics in the European region continued to slow down in the middle of the third quarter of 2023 owing to the slow demand from spandex-consuming industries. Exporters are thrilled about the "historic" outcome of the G20 Summit, where a decision was made to create an economic pathway connecting India to Europe through the Middle East. Traders believe this corridor will substantially reduce shipping expenses and transit times for containers, potentially revolutionizing the prospects, particularly those involved in the clothing and textiles sectors, impacting the overall price range of PMEG. Price quotations for PTMEG at the August end of August were observed at USD 3130 per MT, FD Hamburg.

The European PTMEG and spandex suppliers are also facing competitive behavior with the other countries offering PTMEG at significantly lower prices due to their lower production costs. A French company is leading a groundbreaking effort to transform the recycling of fashion waste through advanced technology. In southern France, state-of-the-art robots are preventing tons of waste from ending up in landfills by disassembling shoes.

The current inflation and the economic uncertainties going on in the European countries have significantly impacted the overall demand-supply chain in the regional market. According to the European Central Bank (ECB), the key interest rates have been raised to a record high of 4% on September 14, 2023. This decision comes as the ECB aims to combat inflation and signals the end of a series of rate hikes. The European spandex and PTMEG market is driven by the demand for premium clothing, increasing awareness about fitness and sports activities, and growing disposable income.

Some European companies heavily involved in energy-intensive basic chemical production may consider reevaluating their strategies. This reassessment could potentially involve a shift toward more specialized downstream sectors, adjustments in their production locations, or substantial investments in sustainable innovation. Several member companies belonging to the British Textile Machinery Association (BTMA) play a crucial but often overlooked role in promoting sustainability within the textile industry. They achieve this by significantly prolonging the operational lifespan of existing machines.

Major factors governing the overall prices of PTMEG include the demand-supply gap, the production cost, which is impacted by the feedstock (tetrahydrofuran), and other upstream elements, including crude oil and naphtha prices. Asia overrules the production capacity of PTMEG globally, as China is the major producer. As per ChemAnalyts, PTMEG prices are expected to decline as the uncertainty in the economic conditions may impact the overall prices of PTMEG in the European market.