PTMEG: gloomy 2024, faring with hope in 2025

Under competition, price of PTMEG was under downtrend in 2024, which stopped falling at the end of third quarter when price declined to be low.

The annual average price of PTMEG calculated based on monthly prices was 13,979yuan/mt, a year-on-year decrease of about 28.7%. Due to the influence of a few high-priced sources, the average price of most mainstream domestic sources was below this level. The significant drop in prices led to a noticeable decline in PTMEG's profitability, increasing the pressure of losses.

Starting from the second quarter of 2024, PTMEG shifted from profit to loss, with losses further increasing in the second half of the year. In the fourth quarter, companies began to face the pressure from losses. It was also due to the heavy loss pressures that PTMEG prices stopped falling in the fourth quarter, and there was a strong intention to curb price from reducing.

The main factor for the price decline was the increasing pressure from the fundamentals. In 2024, the supply-demand gap for PTMEG widened. The startup of some downstream spandex units was delayed, while the release of PTMEG capacity increased. The launch of some new PTMEG plants was also postponed in the second half of 2024 but supply of PTMEG was apparently more excessive in 2024 comparing to the capacity expansion speed on downstream sector.

By the end of 2024, the capacity of PTMEG was projected to be 1.351 million tons, a year-on-year increase of 18.6%. The growth rate slightly slowed compared to 2023. However, from the perspective of actual supply, the new units added in 2023 was concentrated in the third and fourth quarters, leading to an effective supply increase concentrated in 2024. However, most new projects were put into production in the first half of 2024.

With continuous capacity expansion, the utilization rate of PTMEG units also decreased, with the average run rate for 2024 at 82%, a year-on-year decrease of 3 percentage points. Notably, in the second half of the year, apparently increasing PTMEG units reduced or stopped production, with the operating rate of PTMEG plants down to 70-80% from 80-90%.

According to preliminary annual statistics, PTMEG's capacity was estimated to be around 1.06-1.07 million tons (the production volume is based on preliminary statistics and may be slightly adjusted after approval), representing a year-on-year growth of about 17%, with the growth rate also slowing compared to 2023. The estimated annual apparent demand was expected to be around 1.02-1.03 million tons, up about 16.3% on the year. Although the growth rate also slowed compared to 2023, it remained at a high growth level. The annual imports of PTMEG is expected to be around 36,000 tons, a significant year-on-year decrease, while the exports is expected to be around 76,000 tons, remaining basically flat year-on-year. The export market in the second half of the year weakened due to the lack of demand in overseas markets. (Specific import and export data will be analyzed and summarized later this month based on customs data.)

In 2024, both the supply and demand for PTMEG maintained high-speed growth, but the growth rate has slowed year-on-year. Relatively speaking, the supply growth was too fast, increasing the pressure of supply surplus in the market. Under internal competition, prices dropped to low levels, and companies began to hover around the cost line. In 2025, there are still many capacity expansion projects for PTMEG, and most of the expansion is for raw material integration for downstream enterprises. In 2024, the prices of products in the industrial chain all fell to a low point, and the enthusiasm for market investment and production was also cooling. There is hope for positive changes in the market fundamentals in 2025.