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From: Emerging Textiles
12 October 2009 -- Polyester intermediate prices were relatively unchanged when China returned to work at the end of last week. The Paraxylene ACP contract was however settled at a very low level, announcing a new fall in PTA prices, while the MEG market may be depressed by the decline in ethylene prices.
Polyester intermediate market prices were relatively unchanged after China returned from a 1-week long vacation.
PTA and MEG prices were however expected further declining, due to a series of depressing factors.
Paraxylene could further slide
Leading paraxylene maker in Asia, Exxon settled its October price at US$840 per metric ton with largest customers BP and Mitsui.
This is a dramatic decline of US$200 from September settlement prices at US$1,040 (see our PX Contract table below).
Other Asian makers of paraxylene suspended settlement discussions with their customers when they learned about the Exxon's decision.
The new settlement price is considered at a very low level if compared with current spot prices.
Rising PX Spot Prices
PX FOB South Korea was however rising on Monday, up US$8 from its level before holidays, at US$857.
At such a price, paraxylene producers are running at loss.
The spread between naphtha and paraxylene prices should not fall below US$300. With a naphtha price currently at US$601 CFR Japan, the paraxylene spot prices should not be below US$905, as a result.
Paraxylene producers are therefore losing US$50 per MT.
Plans were already implemented for sharply lowering PX production in Asia but they are only expected limiting the fall in prices and certainly not reversing the downward trend.
With their material costs in free fall, PTA producers are now under pressure for reducing their prices.
MEG suppliers may also be forced cutting their prices after ethylene costs were significantly down in the past period, falling US$20 at US$830 per MT CIF China.
Ethylene glycol prices however remained firm over the holiday period, even gaining US$20 (+3%) at US$680 CIF China.
- Send to EmergingTextiles.com
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