In the first half of 2024, Isophthalic Acid (PIA) prices have decreased due to oversupply and weaker demand, with key producers in East Asia and Europe (South Korea, Japan, Taiwan), (Spain) playing a significant role in the market. Production in East Asia and Europe remains strong, with several major chemical producers maintaining steady output levels. South Korea, Japan and Taiwan as one of the largest global producers of PIA, continues to have a substantial market share, with its industry contributing significantly to the overall supply. The combination of high production levels in these regions, along with subdued demand from downstream sectors like packaging, automotive, and electronic, has led to an oversupply, putting downward pressure on PIA prices.
In Q1 of 2024, Isophthalic Acid (PIA) prices showed a bearish trend compared to Q3 2023, primarily driven by an oversupply of the product and weaker demand across key regions. In South Korea prices fell by 6.8% and 7.8% in Taiwan and Japan reflecting continued high production levels and reduced consumption from downstream sectors such as automotive and packaging. Similarly, in Spain, prices decreased by 4%, as demand remained subdued due to slower economic growth and weaker industrial activity. The overall market was further pressured by stable feedstock costs, particularly form m-xylene, which alleviated production cost pressures but did not stimulate demand. This combination of excess supply and lacklustre demand led to a price decline in South Korea, Taiwan, Japan and Spain which also affected importing countries like India, Brazil, USA, Indonesia and Saudi Arabia where lower demand for PIA from end-user industries further exacerbated the price drop.
In Q2 2024, Isophthalic Acid (PIA) prices showed a bullish recovery in South Korea Taiwan and Japan, rising by 2.3%,1.9% and 4%. This recovery was driven by a rebound in demand from downstream sectors such as packaging, automotive, textile, and electronic, as economic activity picked up and production resumed after seasonal slowdowns. Additionally, some tightening in supply due to production adjustments helped to support prices. In Spain, prices remain stable, as the market found balance between supply and demand. Despite ongoing economic challenges, the stabilization was fuelled by steady demand from key industries, along with more favourable feedstock pricing form m-xylene. The combination of these factors helped to stabilize prices after the bearish trend in Q1, leading to moderate increases in East Asia and Europe.
In Q3 of 2024, Isophthalic Acid (PIA) prices surged in East Asia countries by (South Korea 2.2%, Taiwan 7 %, Japan 1.3 %) and in Europe (Spain by 2.6%), driven by supply constraints, maintenance shutdowns, and increased demand across industries like automotive and textile. This surge significantly impacted importing nations such as Brazil, USA, Indonesia, Saudi Arabia and India. All the regions, which rely heavily on imports for PIA, faced higher procurement costs, leading to increased production expenses for their downstream industries, including automotive, textile, and packaging. As a result, manufacturers in these nations experienced tighter margins, potentially passing on higher costs to consumers, which could slow economic growth in affected sectors.
In Q4 2024, Isophthalic Acid prices are expected to decrease in the East Asian region due to decline in the seasonal demand from the textile and automotive sectors and due to lower buyer activity in the region and destocking towards the end of the year, whereas in the European region demand will surge up due to seasonal change and putting upward pressure on the prices.
