PTMEG prices fail to resist pressure and start diving

Compared with prices of BDO and spandex, price of PTMEG has more resistance to fall in the second half of 2023, while it also sped up to reduce in Nov after new PTMEG units started operation.

Prices of BDO and PTMEG were largely consistent in the first half of 2023 and became diversified in the second half of year. New BDO units started production earlier and price of BDO gradually decreased to shiver around the cost line with intensified inner competition. New PTMEG plants are late in commissioning operation. Supported by downstream demand, supply of PTMEG was tight, supporting PTMEG price to be firm.

Some new PTMEG plants started production from Sep and saw stable operation in Oct. Increasing new units will be put into production. Supply of PTMEG is estimated to change. Coupled with reducing BDO price, price of PTMEG started dropping but the decrement was small in Oct with strong market fundamental.

Supply of PTMEG increases. Huaheng Energy's two PTMEG units with total capacity at 92kt/year have witnessed stable operation, and it started selling PTMEG on the market. Hangzhou Sanlong and Hyosung Chemical also have PTMEG available to be sold on the market. In addition, at the end of year, the startup of new units like Blue Ridge Tunhe and Hengli Petrochemical is propelled under plan. Bearish view is held toward later supply. Profit of PTMEG is estimated to be squeezed.

More downstream spandex plants plan to scale down production with the worry of demand and cost.

Most production curtailment of spandex units are scheduled to happen in Dec-Feb when demand for spandex is supposed to be low. In expectation of bearish feedstock market, most spandex producers greatly reduce purchasing raw material in Nov.

The discussing price of PTMEG is anticipated to reduce by more than 1000yuan/mt in Nov, still not to the price idea of buyers, but it has descended apparently more over last month. As some spandex plants plan to have turnaround, demand for PTMEG will face big pressure. In addition, new PTMEG units are scheduled to start production. Buyers show low buying interest. Price of PTMEG is estimated to be hard to stop falling in Dec. Prices of BDO, PTMEG and spandex are all likely to consolidate around the cost line.