Weak PTA behind call for feedstock relief

09 August 1997 00:00  [Source: ICB]

Collapsing Far East markets and weaker demand for PTA worldwide is prompting PTA buyers to push for paraxylene feedstock price decreases. Asian PTA prices have slipped from $610-620/tonne at the beginning of July to $580/tonne CFR China as the traditional PTA buying season draws to a close. Asian buyer inventories are reported to be high and Korean export material is now on offer to Europe at $585/tonne fob Korea. Prices are expected to fall further with one source attributing the current slide to low priced coproducer deals.

PTA producers say at current PTA price levels, raw material paraxylene contract prices will have to come down 1.5-2 cent/lb in quarter four. This is contrary to supplier nominations in Asia of 1-3 cent/lb above the 22.5 cent/lb third quarter contract.

European buyers are echoing the sentiments of the Far East. 'Any increase in paraxylene cannot be justified,' said one major buyer. 'Spot prices in Rotterdam indicate that material is available. We will be looking for a flat or lower PX number to make up for the exchange rate in the third quarter.' European spot PX numbers are around third quarter contract at $470-500/tonne fob Rotterdam. European PTA supply which was tight in early summer has recovered and NWE prices have softened to DM1180-1200/tonne fob Rotterdam.

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