India makes another own goal.
Indian buyers will actively look for purified terephthalic acid from alternate sources after the Bureau of Indian Standards import certification norms set in from June 22, leaving Chinese supplies out of reach, sources told S&P Global Commodity Insights this week.
China has been one of the largest suppliers of PTA to India as domestic demand in the country continues to grow with local production unable to cater to the increasing consumption trends, traders said.
From January to April 2023, India imported around 543,060 mt of PTA of which 336,953 mt, or around
62% was from China alone, data from India's Department of Commerce website showed.
Suppliers in several other countries such as Taiwan, Indonesia, Thailand and South Korea have procured the certification, sources said.
India may turn to South Korea: "Seems like lots of Korean traders are hearing inquiries from India," a PTA producer in South Korea said.
While the Indian market may seem a lucrative option,
suppliers in South Korea are not too excited with the prospect of catering to India's PTA demand. South Korean producers may not have the capacity to supply to India at the moment. Also, supplying to India may mean sacrificing on other export markets such as Turkey, US or Europe, a trader in South Korea said.
And
with US and Europe markets not getting South Korean supplies, they will turn to China instead, the trader added.
The recent developments have not flustered Chinese producers much, a PTA producer in China said.
"I think the BIS extension [not coming through] has little effect," the producer said, while adding that it was expected by the market.
Market participants also said that
China could sell South Korea its PTA, which could then be diverted to India.
