Purified Terephthalic Acid Market Dynamics

Upstream feedstock paraxylene costs are among the key factors that affect purified terephthalic acid (PTA) prices. Currently, paraxylene prices at some regions are demonstrating a downward trend amidst robust supply and a decrease in the demand for its derivatives. This trend is evident in the US market where terephthalic acid prices dropped after closely following paraxylene costs. In Europe, contract paraxylene prices went down from around EUR 1000/tonne in March-April 2019 to EUR 900/tonne in May-June, 2019. This will likely drive the PTA price down. Other regional PTA markets may exhibit different price trajectories.

Overall, the Chinese PTA market remains strong with ongoing significant market growth, large capacity additions over the recent years and high capacity utilization rates. China is quickly turning into a net PTA exporter as its PTA imports have been steadily declining while its PTA exports have been constantly growing. For instance, in 2019, PTA exports by China is estimated to hit 900,000 tonnes, thus exceeding its PTA imports (for comparison, in 2009 China imported over 5 mln tonnes of PTA). Currently, PTA production margins in China are improving, backed by price increases and summer turnarounds. Of course, the slowdown of the Chinese economy might be a detrimental factor, though the reverse scenario is highly probable when the slowdown can act as a balancing factor for the local PTA market. China is a global leader in PTA production.

Purified terephthalic acid: structure of the global production by country

Terephthalic acid and its salts are also among products that are covered by the US duties in relation to a wide range of Chinese products. In retaliation, China included terephthalic acid in its list of the US products against which duties are imposed. The traded PTA amounts between China and the USA are almost negligible (just small PTA quantities are supplied by China to the US) so the effect of these tariffs on the PTA markets of the two countries may reveal only indirectly.

More information on the global terephthalic acid market in the comprehensive research study “Terephthalic Acid (PTA): 2019 World Market Outlook and Forecast up to 2028”.