No progress on BIS certification, Indian PTA price rises

According to customs data, PTA imports in June 2023 were 0.05 million tons, a year-on-year decrease of 88%, while PTA exports were 308.6kt, down 21.4% compared to the previous year. Notably, exports to India saw the most significant decline, falling to 9.8kt.

Total PTA exports from January to June reached 1.9942 million tons, a year-on-year decline of 3.2%. The main destinations are India, Turkey, Vietnam, Egypt, Pakistan, Saudi Arabia, Oman, and Russia. PTA exports to India maintained the top position, accounting for a significant 29% of the total export volume.

Compared to the same period last year, PTA exports to India in the first half of the year were 577,500 tons, only a 2% decrease, which is not significant. Some factors, such as the impact of BIS (Bureau of Indian Standards) certification and pre-placement of orders, contributed to this. The reduction in exports was primarily evident in countries and regions such as Turkey, Oman, Taiwan (China), Bangladesh, and South Africa. However, there was a notable increase in export volumes to Egypt, Pakistan, Russia, and Argentina.

Currently, some PTA from South Korea, Taiwan (China), Indonesia, and Thailand can be exported to India. However, PTA plant operating rate in these countries and regions has not increased, and in some cases, it has even decreased due to plant maintenance and production adjustments. For example, OPTC's 500kt/year PTA plant is currently undergoing maintenance. As a result, since June, PTA prices in India have risen with CFR India price negotiated at average prices plus a premium of $10/mt or more. This has led to an expansion in the price spread between China and India's PTA, temporarily increasing production costs for Indian polyester factories.

Last week, India announced the extension of the BIS certification for polyester filament yarn FDY (IS 17261:2019) and POY (IS 17262:2019) to October 5, 2023. Compared to producing polyester domestically at higher prices, China's filament yarn and PET chip prices have a competitive advantage. Consequently, the atmosphere of export inquiries improved, leading to increased export volumes.

PTA export volumes in the second half of the year may decline compared to the first half. Despite China's industrial advantage and competitive PTA prices globally, exports are still constrained by factors such as tariffs, logistics, and policies. The main focus remains on India's BIS certification. Currently, there is no further news on the certification, and in the short term, exporting to India is virtually impossible. Even if there are changes in logistics in the future, it will still require time.