Slowdown in Automotive Industry Leads to Decline in PPD Market in South Korea and USA

The Para Phenylene Diamine (PPD) market experienced a downturn in both South Korea and the US in February 2024. The decline in South Korea was due to reduced demand from the Automotive industry, leading to an oversupply of PPD in storage facilities. Meanwhile in the US, the Automotive sector was on the rise but had adequate PPD inventory to meet the increased demand.

In the US market, PPD prices dropped by 1.53% to USD 3200/MT (CFR-Texas) in February 2024. The demand from the Automotive sector led to an increase in PPD consumption, but production was scaled back to utilize existing inventory levels. Additionally, the electric vehicle (EV) market in the US fell short of expectations, largely due to high prices and limited options for consumers.

On the other hand, South Korea saw a 1.90% decrease in PPD sales in February 2024. This was mainly attributed to production stoppages at Hyundai for plant refurbishments and line maintenance, as well as reduced working days due to Lunar New Year holidays. Domestic vehicle sales in South Korea dropped by 11% in the initial two months of 2024, with Hyundai’s sales decreasing by 16% and Kia’s experiencing a marginal drop.

Despite the decline in the PPD market, there have been signs of improvement in the US manufacturing sector. The Manufacturing PMI increased significantly in February 2024, marking the fastest growth since July 2022. New orders and export orders expanded at a rapid pace, offering a positive outlook for the industry.

Looking ahead, it is predicted that the demand for PPD may increase in the coming weeks as existing inventories are consumed. This could result in heightened trading activities and a potential rise in PPD prices. As for South Korea, the Consumer Price Index (CPI) increased in February 2024, indicating increased market activity.

In conclusion, the slowdown in the Automotive industry has had a significant impact on the PPD market in South Korea and the US. While the US is showing signs of improvement in its manufacturing sector, South Korea continues to grapple with challenges affecting the demand for PPD. It remains to be seen how the market will respond as existing inventories are depleted and trading activities potentially increase.