For the Quarter Ending March 2024
North America
In Q1 2024, the Para Phenylene Diamine (PPD) market in North America witnessed a positive pricing environment, with significant factors influencing market prices. The USA, in particular, experienced the maximum price changes. Several factors contributed to the incline in PPD prices. Firstly, the demand from the downstream automotive sectors was high, resulting in increased consumption of existing inventory levels. This led to a deficiency in the stocks and an incline in the rate of production. Additionally, the increase in transportation costs, caused by the redirection of shipments due to the Red Sea crisis, added to the overall cost of the product.
Furthermore, the bullish market sentiment was influenced by the low inventory levels and the decline in prices of PPD's feedstock, Aniline. This lowered the production cost of PPD, putting further downward pressure on prices, however, due to the strong demand, the prices of PPD experienced an incline in their trend.
In terms of overall trends and seasonality, the PPD market experienced an incline compared to the same quarter last year. In conclusion, the Q1 2024 pricing environment for PPD in North America, specifically in the USA, was positive. The market faced challenges due to strong demand, low inventory levels, and increased transportation costs.
APAC
The first quarter of 2024 has been a mixed period for Para Phenylene Diamine (PPD) prices in the APAC region. While some countries experienced slightly positive trends, South Korea saw significant price changes. Overall, the market situation for PPD in South Korea has been bullish, with supply levels ranging from low to moderate. The demand from the downstream automotive and tire sectors was strong resulting in increased consumption rates of existing inventories. The supply tightening has been attributed to factors such as production stoppages, reduced working days due to holidays, and delayed government subsidies for electric vehicle sales. In terms of supply, the existing inventory levels have been insufficient to fulfill demand, leading to low supply levels. Additionally, the export sales of PPD from South Korea have increased, indicating a higher demand from overseas markets. However, the price trend for PPD in South Korea has been bearish, with a decline of 1.90% in February 2024 compared to the previous month. This can be attributed to the low demand and ample supply in the market. The prices of PPD in South Korea were bullish in Q1 of 2024 as compared to the previous quarter, with an incline of 14.64%. Overall, the pricing environment for PPD in the APAC region during Q1 2024 has been bullish, with strong demand, inadequate supply, and inclining prices in South Korea.
Europe
In the first quarter of 2024, the pricing landscape for Para Phenylene Diamine (PPD) in Europe exhibited a bullish trend, shaped by several key factors impacting the market dynamics. Among these factors were the demand stemming from the downstream Automotive sector, the levels of available inventory, and the prices of raw materials. Throughout Q1 2024, the prices of PPD consistently rose, a trend primarily fueled by the strong demand originating from the Automotive sector and the status of inventory levels. Notably, the demand for passenger cars experienced a substantial surge, marked by a significant year-on-year increase. Experts attribute this surge to the widespread availability of discounts and promotional offers, prompting consumers to expedite their purchasing decisions in anticipation of potential price hikes for imported vehicles from countries within the Eurasian Economic Union (EAEU). Analysts further suggest that this heightened demand for passenger cars contributed significantly to the upward trajectory of PPD prices. Overall, the pricing environment for PPD in Europe during Q1 2024 was characterized by an upward trend with minimal fluctuations. The market was predominantly driven by the robust demand originating from the Automotive sector and the consistent availability of inventory levels in storage units, reflecting a bullish scenario for PPD prices in the region.
For the Quarter Ending December 2023
North America
In Q4 2023, the North American market for Para Phenylene Diamine (PPD) experienced several significant factors that impacted prices. Firstly, there was a high demand for PPD from the downstream automotive sectors, leading to increased consumption and the need for restocking. This elevated demand, combined with limited supplies from China, resulted in a tightening of PPD inventories in the USA. Suppliers responded to these market conditions by raising their quotations, thereby pushing prices higher. Additionally, the prices of PPD's feedstock, Aniline, and Nitrobenzene, increased, contributing to the overall upward price trend. It is important to note that no plant shutdowns were recorded during this quarter.
In the USA, which experienced the most significant price changes, PPD prices increased by 10% in November, however, declined in December 2023, a decline of 1.2% was recorded due to the lower demand from the downstream automotive industries and the increase of 6-PPD inventory levels. Due to the disruption caused by the Yemen-based Houthi attack in the Red Sea, shipments of goods from South Korea to the USA experienced delays. To navigate the situation, ships were redirected around the Cape of Good Hope, resulting in an additional 9-10 days for the shipments. Along with the sufficient inventory level of 6-PPD in the storage facilities, the price of its upstream Aniline market was recorded to be declining. This resulted in lower operational costs for 6-PPD, contributing to the downward price trend. The market players became anxious and started providing discounts on bulk purchases to attract buyers to clear out their existing inventory levels.
In conclusion, the price trend for PPD in the USA remained bullish throughout the quarter, driven by the robust market fundamentals. The latest Para Phenylene Diamine prices for 6 PPD CFR Texas in the USA at the end of the quarter was USD 3280/MT. Overall, this quarter saw a positive price movement for PPD in the North American market, driven by strong demand and limited supplies.
APAC
The fourth quarter of 2023 was characterized by a bullish market for Para Phenylene Diamine (PPD) in the APAC region. The supply of PPD was low, leading to a shortage and strong demand from downstream industries. This resulted in enhanced profit margins and revenue for PPD producers. The demand from the downstream automotive sectors was high, prompting producers to increase production rates. There were no reported plant shutdowns during this quarter. Among the countries in the APAC region, South Korea witnessed significant changes in PPD prices. The prices of PPD in South Korea showed an upward trend, with an increase of 4.10% compared to the previous quarter. The strong demand from the downstream automotive industry, coupled with low supplies, contributed to this price increase. Additionally, the prices of the feedstocks for PPD, Aniline, and Nitrobenzene, had contrasting trends, with Aniline prices declining and Nitrobenzene prices inclining. In terms of price comparison, the current quarter's price of PPD in South Korea, which is USD 2800/MT (FOB Busan), increased by 9% compared to the same quarter in the previous year. However, there was no significant difference in price between the first and second half of the quarter. Overall, the bullish market conditions, low supply, and high demand from downstream industries were the primary factors driving the price trend of PPD in the APAC region, particularly in South Korea. The latest price of PPD in South Korea for the current quarter is USD 2800/MT (FOB Busan).
Europe
In the fourth quarter of 2023, the prices of 6-PPD showcased a bullish trend throughout the quarter. There was a shortage of 6-PPD supplies as the existing stock couldn't meet the increasing demand from the automotive industries. Given the market conditions, producers increased the commodity's production rate to meet the rising demand from the downstream automotive sector. Despite rising prices due to increased quotations from traders as they were trying to improve their marginal profits along with the sales, buyers escalated purchasing activities to cope with the demand. The heightened demand from downstream automotive industries led to increased trade to fulfill market needs. Elevated trade activities between major manufacturing units stemmed from low inventories and heightened demand from downstream automotive enterprises. The market was further impacted by increased freight charges attributed to rising fuel transportation costs adding up to the overall prices of the commodity. The consumption of the existing inventories was done at a higher rate due to which the need to restock them again was created.
For the Quarter Ending September 2023
North America
During the 3rd quarter of 2023, Para Phenylene Diamine (PPD) showcased a bearish price trend. This price trend was primarily driven by a weakening in the demand from the downstream Dyes and Cosmetics enterprises. Additionally, traders refused their offers and bids to improve their profit margins due to the weak trend in the spot market and instead provided discounts to the buyers on the bulk purchases of the commodity. At the same time, adequate supplies from China played a significant role in pulling down the price trend for PPD. In addition, the decline in the prices of the raw materials Aniline and Nitrobenzene has further supported the overall market trend, and the production rate was reduced by the producers to avoid the oversupplies of PPD. The feeble demand from the downstream Dyes and Cosmetics enterprises left sufficient supplies in inventories, resulting in the declined price trend of the commodity. The consumption of the existing inventories was done at a slower rate due to which the need to restock them again was not needed. Therefore, the no. of cargo from China to the USA decreased as well.
Asia Pacific
The market price trend of Para Phenylene Diamine (PPD) declined in the 3rd quarter of 2023 and reached USD 2560/MT (FOB-Qingdao). Considering the market situation, the exporters declined their quotations so that the inventories could be cleared out for the upcoming fresh stocks. Simultaneously, the price trend of feedstocks Aniline and Nitrobenzene declined as well due to the low demand from the downstream Dyes and Cosmetics markets. The downward movement in the price trend of the commodity is mainly due to the adequate supply of the product to the market and feeble demand from the domestic market, for which the production rate was decreased by the producers. Domestic buyers are avoiding purchasing the product based on the declining demand from the downstream Hair Dyes and Cosmetics markets. The operating rate for the commodity declined as well, supporting the price trend of the commodity. The spread between the end products and their feedstocks was less, which represents the bearish market situation for the commodity.
Europe
In the European market, the price trend of Para Phenylene Diamine (PPD) declined during the 3rd quarter ending on September 2023. The decline in the prices of its upstream Aniline and Nitrobenzene market has negatively impacted the market value of PPD. The production costs for manufacturing PPD have also significantly decreased and are one of the factors for the decreased prices of the commodity. Due to the falling demand from the downstream Hair Dyes and Cosmetics sector, the consumption of the existing inventories in the storage units declined. As a result of sufficient inventories, the suppliers declined their offers and bids to improve their profit margins and instead provided discounts to the buyers on bulk purchases to clear out the inventories for the upcoming fresh stocks. The demand for the product from the downstream Hair Dyes and Cosmetics sector was compensated by the existing inventories in the storage units with no need to restock the commodity. Due to the sufficient stocks, the production rate of the commodity was reduced to avoid the oversupplies of the product.
