China Oct PTA at $720-730/t, Nov may be settled next week

08 January 2009 08:09  [Source: ICIS news]

SINGAPORE (ICIS news)--China’s October 2008 purified terephthalic acid (PTA) contracts were settled at $720-730/tonne (€525.6-532.9/tonne), down by about 15% from the previous month, with November contracts expected to be settled next week at the earliest, buyers and sellers said on Thursday.

There is a growing consensus among market players that November deals will be sealed at a lower price of $550-570/tonne CFR (cost and freight) China, market sources said.

September PTA contracts were settled at $850/tonne CFR China.

Settlement of monthy contracts were delayed as pricing had been highly controversial in recent months due to constant price adjustments by suppliers struggling to stave off stiff competition posed by excess supply in Asia.

"The October price was $720-730/tonne for the PTA I bought, although some spot materials were cheaper or more expensive than that," said the procurement manager of Zhejiang Hong Jian, a polyester filament yarn producer in eastern China.

"We sold at $730/tonne, but some of the volumes saw adjustments towards $720/tonne as well eventually," said a source of Formosa Chemical & Fibre Corp, a Taiwanese PTA producer.

As for November, the FCFC source said negotiations to settle around $560/tonne CFR China were "into final stages" and a settlement could emerge as early as next week.

"We’re asking for $550/tonne or below for November, but prices rose after [November] so the suppliers’ attitude is that we accept what was given to us," said a source from Zhejiang Longda, another filament yarn maker in eastern China.

"We’ll see how it goes, maybe $560/tonne [for November] is not so bad after all," said a source from Xiang Sheng Polyester, a filament yarn and fibre chip maker in eastern China.

Due to oversupply and weak demand, spot PTA prices in October fell from $830/tonne CFR China to $650/tonne by the end of the month, and fell further to $550/tonne by the end of November.

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By: Salmon Aidan Lee
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