Analyst Insights

• PTA prices decline on weaker upstream costs, PTA fundamentals stable.
• China PET resin export prices ebb lower; raw material spread show upward trend.
• Whilst export sales are robust, slower domestic sales, new capacity, and trade barriers threaten.

Despite heavy pressure from the US, Brazil will maintain tariffs on US ethanol imports. Brazil increased its tariff on ethanol imported from the US from 16% to 18% this year.

The decline in urea prices has come to a temporary halt mainly due to uncertainty over the confusing export restriction policy in China. Other fertiliser markets are quiet. Ammonia could gain some temporary support from a Ma’aden plant shutdown.

Daily Market Price Updates and Commentary 

China imported 220,000 tonnes of liquid sugar and 100,000 tonnes of premix powder in Q1’24. But customs have now decided to regulate whites imports in bonded area for liquids and premix. Could it affect China’s white sugar demand?

• Global per capita sugar stocks are the lowest in at least a decade.
• Stocks should start to rebuild as sugar production increases in 2024/25.
• But stocks are likely to be held in Brazil and India, rather than where they’re needed.

• Recent massive capacity expansion fuelling a surge in Chinese PET resin exports.
• South Korean drift lower on seasonal trends, whilst continuing to target the US market.
• Brazil’s imports continue to outstrip exports on reduced volumes.

Daily Market Price Updates and Commentary

The legislation is expected to come into force this year, after being approved in the Senate. Around BRL 200 billion should be invested by the end of the decade in the production of SAF, biodiesel and biomethane to meet decarbonization goals.

Brazil should soon approve the Fuel of the Future bill. It was created to encourage the production and use of sustainable fuels. Among the proposals are goals for an increase in the mixture of ethanol in gasoline and targets for the use of biomethane and SAF.

Sustainable aviation fuel (SAF) is the only realistic route for net carbon emissions to be reduced for air travel. However, the challenge for producers is now to upgrade the energy content of SAF feedstocks so they can compete with traditional alternatives.

Europe’s carbon market has become a “price taker” rather than a “price maker” when it comes to driving the EU’s decarbonisation efforts. Carbon prices are now broadly tracking the EU gas market. This means they may be volatile in the future.