31 May 2010 06:48 [Source: ICIS news]
By Bohan Loh
SINGAPORE (ICIS news)--Paraxylene prices in Asia face a severe strain in the third quarter, with nearly 2m tonnes of capacity coming back on stream from June onwards, market sources said on Monday. (please see table below)
A number of producers were not inclined to cut output, based on a survey conducted by ICIS news, even though spot prices fell to an eight-month low of $880/tonne (€713/tonne) CFR (cost and freight) Taiwan and/or CMP (China Main Port) last week due to oversupply.
Buying sentiment, meanwhile, remained weak from end-users in the downstream purified terephathalic acid (PTA) market, industry sources said.
About 98% of PX is consumed in the polyester chain, mainly in the production of fibre, film and polyethylene terephthalate (PET).
But gains in upstream crude values, which rose above $74/bbl on Monday, provided an impetus for regional traders to talk the market up. By mid-day, discussions for July parcels were heard hovering around $950/tonne CFR Taiwan and/or CMP between traders.
Buying indications from end-users were still pegged slightly below the $900/tonne CFR Taiwan and/or CMP mark, as most had ample inventory levels or have secured through contracts sufficient volumes of raw materials for the year.
($1 = €0.81)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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