Reasons behind the 8-fold increase in PTMEG imports in August 2023

According to latest data from China customs, imports of PTMEG totaled 4734 tons in Aug 2023, up by 40.5% m-o-m and 809% y-o-y respectively, and it amounted to 29kt in Jan-Aug, a year-on-year rise of 51.3%.

Imports of PTMEG in Jan-Apr, 2023 were close to the same period of last year, while the disparity enlarged after May. The major reason was that supply of PTMEG was tight in Chinese mainland with changing supply/demand pattern in 2023. Another reason was that spandex companies greatly scaled down production in 2022 when they suffered bigger losses with rapidly falling cost and demand was in stagnation.

Operating rate of spandex plants started falling from May 2022 month on month and more units suspended or curtailed production in Jul-Aug when sales failed to improve and the inventory of spandex was greatly depreciated, with monthly run rate in Aug down to around 50% and hitting the historic low. Great production curtailment of spandex plants resulted into weaker demand for raw material. The imports of PTMEG also hit historic low, which was only at 521 tons in Aug 2022, while after demand recovered in 2023, the imports of PTMEG in Aug 2023 soared by 8 times on the year.

There were huge disparity in terms of price in 2022 and Q1-Q3, 2023. The settlement of price for domestic PTMEG and imported PTMEG has time difference, which is earlier for imported resources. Therefore, buyers were more cautious in procuring when price was plunging, which was another reason for low import of PTMEG in Aug 2022.

Taiwan, China was still major import origin for PTMEG in Aug. Imports from Taiwan, China approached 3860 tons in Aug 2023 (the inner circle), up by 998% on annual basis, accounting for 81%, up by 14 percentage points on the year (the outer circle). Imports from South Korea reached 656 tons in Aug 2023, taking up 14%, down by 18 percentage points year on year, while the import volume rose by 298%. Imports from other regions like Japan grew in 2023 while the volume remained small.