For the Quarter Ending December 2024
North America
The North American Isophthalic Acid market in Q4 2024 experienced subdued conditions mirroring trends in the upstream Purified Terephthalic Acid (PTA) market, its primary feedstock. Additionally, demand fundamentals from the downstream packaging sector also shaped the pricing trajectory of Isophthalic Acid. Weak demand from the packaging industry, a key consumer of Isophthalic Acid, was the overarching factor influencing market dynamics throughout the quarter.
The overall market sentiment remained bearish throughout Q4. October saw stable prices, influenced by sluggish US economic activity and tepid demand from the packaging sector. However, November brought a decrease in prices due to oversupply from early destocking, coupled with the off-peak season for polyester. This downward trend continued into December, with a further price drop, driven by weak downstream demand and ample domestic supply.
Isophthalic Acid market participants faced several challenges in Q4 2024. Weak demand, coupled with ample supply, put downward pressure on prices, squeezing profit margins. Supply chain disruptions increased costs and complicated logistics. The overall economic uncertainty further added to the challenges, causing buyers to adopt a wait-and-see approach and delay purchases.
Europe
The European Isophthalic Acid market in Q4 2024, particularly in Germany, experienced a complex interplay of factors impacting pricing and market sentiment. The overall trend mirrors the volatility observed in the upstream PTA market, its primary feedstock, and the shared downstream packaging sector.
The quarter began with a relatively subdued market, reflecting the continued weakness in the downstream packaging sector. Low demand from this sector, exacerbated by the cold winter months reducing demand for plastic bottles, and cautious buying behavior from processors created a sluggish start. While there were periods of price increases driven by increased orders and restocking activity, particularly in November, these gains were largely offset by the persistent bearish sentiment and weak downstream demand. The pre-holiday season in December saw additional downward pressure on prices.
The combination of weak demand, price volatility, and economic uncertainty presented significant challenges for market participants. Producers faced difficulties in maintaining pricing power, while buyers exhibited cautious purchasing behavior, delaying the replenishment of inventories. The general uncertainty created a wait-and-see approach, hindering market activity and further dampening prices. The low demand and resulting oversupply put significant downward pressure on profit margins across the packaging sector.
APAC
The APAC Isophthalic Acid market, specifically in China, experienced a generally bearish Q4 2024, with prices fluctuating around a downward trend. The quarter began with a marginal price decline in October, driven by weak downstream demand in the polyethylene terephthalate (PET) market and falling crude oil prices. While a temporary price increase occurred later in October due to increased international demand, particularly from India, the overall trend remained downward. November witnessed a more significant price decline, linked to weak petrochemical market conditions, an oversupply of meta-xylene, and continued weak PET market demand. December saw prices stabilize, with sluggish demand from downstream sectors and oversupply leading to some plant shutdowns. However, gradual inventory depletion towards the end of the quarter hinted at potential future price increases.
The performance of the downstream PET market was a significant driver, with weak demand and falling feedstock costs impacting isophthalic acid prices. Fluctuations in crude oil prices and meta-xylene supply also influenced the market. Seasonal factors, particularly the slowdown in demand towards the end of the year, contributed to the overall bearish trend. The quarter ended with isophthalic acid priced at USD 1125/MT FOB Qingdao.
For the Quarter Ending September 2024
North America
In Q3 2024, the North American Isophthalic Acid market experienced a sustained decline in prices, with the USA witnessing the most significant changes. The decline in the price of m-xylene, a critical feedstock in isophthalic acid manufacturing, reduced production costs.
This has allowed manufacturers to lower their selling prices to remain competitive. Prices for m-xylene fell due to dampened market sentiments and lower overseas import offers. Due to the dullness of the off-season, downstream demand for isophthalic acid, especially from PET resin and its derivative industry, has remained low. This decreased demand has pushed down the costs of both m-xylene and isophthalic acid.
The overall trend for Isophthalic Acid prices in the USA has been negative. In Q3 2024, prices decreased by 9% compared to the previous quarter, indicating a continuing downward trajectory. The second half of the quarter saw a significant -8% price difference from the first half, reflecting a pronounced decline. As the quarter concluded, Isophthalic Acid CFR Texas in the USA settled at USD 1340/MT, highlighting the prevailing decreasing sentiment in the market.
APAC
In Q3 2024, the Isophthalic Acid market in the Asia-Pacific region witnessed a significant decrease in prices, influenced by various factors. The quarter saw a 5% decrease from the previous quarter in 2024. China, in particular, experienced the most substantial price changes, reflecting a -8% difference between the first and second half of the quarter. The market faced a downturn in Q3 2024 due to several factors including excess supply, weak consumer spending, and slow demand from the downstream PET resin industry. This combination led to lower prices and negative market sentiment. Furthermore, the decline in crude oil prices and disruptions in global shipping further impacted pricing dynamics. In China, the Isophthalic Acid market faced notable fluctuations, with prices showing a downward trend. The quarter-ending price of Isophthalic Acid FOB Qingdao in China stood at USD 1140/MT, indicating a consistent decrease. Overall, the pricing environment for Isophthalic Acid in the APAC region during Q3 2024 has been characterized by negative sentiment, with prices steadily declining.
Europe
The European Isophthalic Acid market in Q3 2024 was impacted by mixed trends, primarily driven by fluctuations in the downstream PET market. Considering downstream, PET prices in Germany experienced a significant 1.1% drop in the first half of Q3. This decline was attributed to weak demand from downstream customers due to low purchasing activity and insufficient cost pressure from feedstock inputs. During this period, demand for Polyethylene Terephthalate (PET) remained limited, particularly from the downstream industries. Consumption levels for PET remained moderate to low, further influenced by the price decrease. This was further impacted by weak consumer sentiment, as confidence in Germany took a significant hit in August. Both income and economic expectations declined sharply, while willingness to spend dropped slightly. In the second half of the quarter, PET resin prices stabilized after a sharp fall in the previous weeks. This stabilization was supported by improving consumer sentiment and a minor increase in PET resin sales. Sustained low feedstock prices and consistent demand contributed to the stabilization of PET resin prices.
For the Quarter Ending June 2024
North America
Isophthalic acid prices have continued to rise in the US market during the second quarter of 2024 supported by the shortage of import supply coupled with high ocean freight rates justified sellers' hike attempts.
In addition, the feedstock m-xylene prices have increased throughout the quarter which led to the high production cost of Isophthalic acid. As a result, manufacturers in the exporting nations, China and South Korea have opted to maintain their prices at elevated levels thus same can be reflected in the import prices. At the same time, imports from the exporting market have been reduced in the US due to port congestion brought on by the adverse weather conditions in the Asian market as well as the lingering Red Sea crisis. As a result, the level of inventories was observed on the lower end in the US market, further contributing to an upward shift in the price realization of Isophthalic acid.
Though, demand for Isophthalic acid from the downstream PET resin and its derivative sector was muted as consumption from the end-user PET resin and its derivative sector has been slowed down in the domestic market. Also, downstream factories were mostly maintaining purchases tied to basic needs, showing low enthusiasm for procurements. The market’s ability to consume raw materials was limited, resulting in an overall sluggish state of demand. Despite this factor, prices of Isophthalic acid have remained buoyant in the domestic market. On the other hand, consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.
Asia- Pacific
Prices of Isophthalic acid have continued to show an uptrend in the South Korean market during the second quarter of 2024 owing to tight supply. The feedstock m-xylene prices have increased followed by strong crude oil prices which resulted in the high production cost of Isophthalic acid, contributing to an uptrend in the price realization of Isophthalic acid in the domestic market. On the demand front, the inquiries from the downstream Polyethylene Terephthalate resin and its derivative industry have largely moderated in the domestic market as consumption from the end-user sector has been steady in the domestic market. Apart from this, South Korea's annual inflation rate in South Korea slowed to 2.9% in April 2024, from 3.1% in the previous month, alleviating the strains from the purchasing power of the end-use industries. At the same time, inquiries from the overseas market have increased in an effort to restock the inventories. According to the Ministry of Trade, Industry and Energy (MOTIE), petrochemical exports from South Korea have increased by 16.3% in April 2024, compared with the previous month. Furthermore, the supply of Isophthalic acid was relatively tight due to low operating rates and some plants have been under maintenance shutdown across the domestic market, keeping the prices elevated in the domestic market.
Europe
Throughout the second quarter of 2024, Isophthalic acid prices have remained on a soft note across the German market amid quiet buying sentiments. A muted purchase interest further lent support to a weak pricing environment. The cost support from feedstock m-xylene was limited to Isophthalic acid as its prices settled on the lower end in the domestic market, causing the prices to follow a downward trend in the domestic market. In addition, domestic operating rates have remained under pressure in the wake of economic uncertainties. Additionally, heavy rainfall and subsequent flooding in Bavaria and Baden-Wurttemberg had a minimal impact on the Isophthalic acid market, with trading activity remaining suppressed. Meanwhile, Asian imports have faced logistical challenges, including cargo delays and disruptions in the Red Sea, although expectations suggest improved flow by the second half of July. Despite this, current material availability in the domestic market has been adequate to meet weak spot and contractual demand levels which weighed down the prices of Isophthalic acid in the domestic market. On the demand front, inquiries from the downstream PET resin and its derivative industry have remained muted with limited instances of new orders reported by market players, supporting the prices to follow a downward trend. In addition, the spot market transactions were also flat amid divergent supply and demand fundamentals with market players anticipating prices to fluctuate further.
For the Quarter Ending March 2024
North America
Throughout the first quarter of 2024, Isophthalic acid prices have witnessed a bearish rally in the US market as prices decreased in the exporting market. The demand for Isophthalic acid from the downstream PET resin and its derivative industry has remained soft amid null season demand, leading to the bearish market sentiments of Isophthalic acid among the sellers of Isophthalic acid.
The market transactions were mainly based on small orders. On the other hand, according to data released by the US Bureau of Labour Statistics, the annual inflation rate in the US has edged up to 3.2% in February 2024, compared to 3.1% in January. Foreseeing the rise in inflationary pressures, the Federal Reserve has effectively ruled out the possibility of an interest rate cut before June, keeping it in the 5.25% to 5.5% range since last July. The firm inflationary pressure has further impacted the purchasing power of consumers.
Meanwhile, imports from Asia have turned cheaper as prices decreased in the exporting market amid sufficient inventories which in turn led to low imported prices of Isophthalic acid in the US market. In addition, spot prices for the China-US routes shifted direction as of mid-February. The cumulative gains were relatively smaller in China-US routes during the upswing. Hence, the slump arrived later at a slower pace. According to Freightos, the latest index for China/East Asia - North America West Coast decreased by 7% to stand at USD 4,419/FEU while the index for the East Coast was also down by 8% to USD 6,107/FEU as of March 2024. Despite this, material availability was limited as buyers were reluctant to stock the material due to tepid demand.
Asia- Pacific
Isophthalic acid prices have continued to decline in the South Korean market throughout the first quarter of 2024. The cost pressure from feedstock m-xylene was limited on Isophthalic acid as its prices settled on the lower end in the given time frame, supporting the prices to follow a downward trend in the domestic market. On the demand front, the inquiries from the downstream PET resin and its derivative industry were flat amid null season demand in the domestic market which weighed down the prices of Isophthalic acid. Most market transactions were mainly based on a need-on-demand basis. In the meantime, demand from the overseas market has also softened amid macroeconomic headwinds as well as low season demand. Furthermore, the Ministry of Trade, Industry and Energy (MOTIE), South Korea’s petrochemical exports in February dropped by 3.1% year on year to USD 3.94bn, reversing the 4.0% growth in the previous month, indicating weak demand. Furthermore, the firm inflationary pressure and high-interest rates have further eroded the purchasing power of consumers and deteriorated the market sentiments of Isophthalic acid in the domestic market. Moreover, material availability was observed on the higher end amid a decline in demand, leading to the bearish market sentiments of Isophthalic acid among the manufacturers.
Europe
Isophthalic acid prices have persistently increased across the German market during the first quarter of 2024. Tightening supply conditions were the main driver behind the price rise, even though demand from the downstream PET resin and its derivative industry has remained under pressure from economic challenges. Additionally, cost support from feedstock m-xylene was sufficient for Isophthalic acid as its prices settled on the higher end in the domestic market. These supported the prices to follow an uptrend in the domestic market. Furthermore, international crude oil prices gained as European diesel demand, constrained by Russian sanctions and shipping disruptions, pulled oil prices higher in a market jittery with US refinery output limited by planned overhauls. The strong crude oil prices have further raised the overall production cost of feedstock m-xylene in the domestic market. Moreover, the price rise was further supported by curtailed output rates and a few outages in the domestic market, leading the limited material availability in the domestic market. However, the overall demand situation could be described as mostly static, with market players having to deal with tepid end-user industry demand, contributing to the uptrend in the price realization of Isophthalic acid in the domestic market. Meanwhile, imports from the Asian market were higher amid elevated freight rates, disrupted supply chains, and firming in other major global markets. This further boosted the market sentiments of Isophthalic acid.
