15 September 2009 06:46 [Source: ICIS news]
By Bohan Loh and Jeremiah Chan
SINGAPORE (ICIS news)--Spot prices of fibre intermediates paraxylene (PX) and purified terephthalic acid (PTA) in Asia could extend their slide if producers do not cut output amid weak demand, market sources said on Tuesday.
PX was in danger of breaking $900/tonne (€612/tonne) CFR (cost and freight) ?xml:namespace>
A Japanese trader said current spot PX discussions have been below this level.
“The key issue here is that there has been no real buying interest from the PTA makers,” said a Korean PX producer.
“If regional producers do not reduce operating rates soon, prices may continue to fall further,” he added.
Spot PX values fell a hefty $25-35/tonne on Monday afternoon to close at a six-month low of $900-920/tonne CFR Taiwan, according to global chemical market intelligence service, ICIS pricing.
“My customers were asking for cargoes below $890/tonne on a CFR basis,” said another trader who deals on aromatics in southeast Asia.
Heading in the same southward path was PTA, which could fall below its key support of $800/tonne CFR China Main Port (CMP) soon as sentiment on
This price was not seen over the past four months.
On Monday, trading of PTA futures came on the verge of being halted after falling as much as 3.65% on the Zhenzhou Commodity Exchange (ZCE), which allows a maximum 4% price swings for commodity futures contracts.
This may have caused the sharp downward spiral of PX values on the same day, market sources said.
PTA spot market players have been increasingly tracking movements on the ZCE futures contracts to gauge market sentiment.
For PX, there was an abundance of prompt delivery cargoes available that allowed end-users and buyers to scout around for the best bargains, market sources said.
A Chinese end-user decided to hold back its purchases even after receiving multiple PX offers for delivery in the second half of September, traders said.
Demand for the fibre intermediates may not pick up after the week-long Chinese National Day holidays from 1-8 October, market sources said.
“Market players [in
In the fourth quarter of last year, PTA makers incurred heavy losses as the commodity nearly shed 30% of its value over a three-month period, based on ICIS pricing data.
Declines in crude and naphtha values further compound the price pressures on PX and PTA, market sources said.
($1 = €0.68)
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