4 July 2011
Spot prices last week fell across the board in the polyester chain in Asia, as China's textile production was experiencing its seasonal decline. Paraxylene contract prices were settled at lower levels, as reflected by our statistical tables, announcing a new decrease in PTA prices in the coming period.
Spot prices were last week falling in the polyester chain in Asia, mostly due to a weak level in demand from textile industry in this period of the year.
PTA prices lost about US$17 per metric ton or 1.47% while MEG prices were down US$10 or 0.81%.
Glycol prices had until now resisted any downward trend, by contrast with PTA prices which continuously decreased over the last weeks.
The tight supply on the global MEG market was however last week more than offset by the lack of demand from polyester fiber makers.
Even after Nan Ya had to stop its Taiwanese plants accounting for about 10% of Asian output, glycol sellers are now confronted with a seasonal lull.
Raw material costs of MEG makers however remained stable on the Asian market, with ethylene staying at US$1,050-1,100 FOB Korea.
A rebound in crude oil and naphtha spot prices obviously offered some support to ethylene prices.
By contrast, the paraxylene spot market in Asia ignored the rise in crude oil market, with PX losing no less than US$65 or 4.61%, down to US$1,345 FOB Korea by July 4th.
PX settlement prices for July were also announced at relatively low levels with Exxon's contract at US$1,450 CFR Asia, down US$50 from previous month.
Idemitsu and JX Nippon Oil settled their contract prices at US$1,440, down US$60 from June.
The PX market is however anticipating a possible rebound in prices when textile and polyester plants will return to full production by August.
New PTA capacities should boost demand for paraxylene in China.
They may also further depress PTA prices or limit any rebound of the market.
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