PTMEG embraces warmer market fundamental after new units extended startup

PTMEG capacity will be expanded substantially in 2024 and the startup of new units is scheduled to be intensive in the first quarter according to the original plan. Many market players hold bearish mindset in expectation of increasing capacity but such mindset eases after the launch of some new units is extended. Coupled with recovering downstream demand, supply and demand of PTMEG market improves.

Many new PTMEG projects which are supposed to be put into production in Mar-Apr are extended at least 2-3 months. According to the startup of new units and their stability, most new units may release capacity in end-Q2 or early-Q3.

The major increase in supply in Q1 2024 is from the second phase of Blue Ridge Tunhe. The operating rate of downstream spandex plants apparently increases after Spring Festival holiday, which has ascended to 84% after more units restarted from turnaround.

Operating rate of spandex plants rapidly advanced from late-Jan and it has recovered to above 80% in mid-Feb after more plants resumed operation, which rose by near 10 percentage points over H1 Jan. More spandex plants are restarting production. That means the demand for PTMEG enjoys steady support.

With growing demand and the delay of new units, supply and demand of PTMEG market is expected to warm up in short run. Players also show better mindset. However, price is still anticipated to be hard to increase in short run. On one hand, the market fundamental warms up but supply and demand is still balanced. There is no supply tightness. On the other hand, downstream plants still encounter inventory burden and price of downstream products is also hard to rise. Price of PTMEG is likely to be largely stable based on market fundamental, difficult to climb up, while that of PTMEG for non-spandex sector under small orders may be able to be raised tentatively.