July PTA aimed $20/tonne lower for China trades

05 July 2007 12:41  [Source: ICIS news]

SINGAPORE (ICIS news)--Leading purified terephthalic acid (PTA) producers in Asia have proposed selling their July material into the key Chinese market $20/tonne lower than the June contract nomination, company sources and their customers said on Thursday, following a drop in spot prices over the past month.

 

The proposals to sell at $940/tonne CFR (cost and freight) China, compared to the June contract nomination of $960/tonne CFR China, which still remained unsettled as it had found no willing buyers.

 

Officials from Japan’s Mitsui Chemicals and Mitsubishi Chemical and Taiwan’s Formosa Chemical & Fiber Corp (FCFC) confirmed that they were looking to offload July volumes at $940/tonne CFR China, with 90 days’ credit.

 

Customers of BP also confirmed that they had received offers from the market leader at such a level. Together with Korean producers Samsung Petrochemical and KP Chemical, the four producers supply more than half of the Chinese market’s imported PTA.

 

“There are [many] requests from customers to ship the material as soon as possible, and we’ve started moving some cargoes at $940/tonne on a tentative basis,” said an official from Mitsubishi.

 

“Demand had definitely recovered and our customers want the PTA,” said a Shanghai-based sales agent for FCFC. “We hope to finish selling the PTA as soon as possible.”

 

Spot prices in China had fallen from a high of $960/tonne CFR China over the past month to $915-920/tonne as of 12:00 London time on Thursday.

 

This compared favourably to Friday’s closing numbers of just above $900/tonne but due to the fundamental oversupply of PTA in the market, the outlook for the rest of the month remained volatile and many sellers feared a repeat of June when buyers generally did not import any PTA, said observers.

By: Salmon Aidan Lee
+65 6780 4359

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