China's PTA and MEG prices hit 8-mth low on 'panic sentiment'

07 June 2010 08:51  [Source: ICIS news]

SINGAPORE (ICIS news)--China’s purified terephthalic acid (PTA) and monoethylene glycol (MEG) spot prices both dived to eight-month low on Monday as a reaction to a plunge in PTA futures pricing on the Zhengzhou Commodity Exchange (ZCE), market source said on Monday.

PTA spot prices fell to around $800-830/tonne (€672-697/tonne) CFR (cost and freight) China Main Port (CMP), down by $30/tonne from last Friday, according to global chemical market intelligence service ICIS pricing.

Buying indications were heard at $820/tonne CFR CMP for Taiwanese PTA and $800/tonne CFR CMP for Korean PTA, traders said.

“We didn’t expect PTA prices to drop such sharply given its relatively balanced market,” a major trader said. Most sellers for PTA remained silent as they preferred to sell after the market calms down.

Less confidence was shown for the MEG market due to a severe oversupply. Bids for MEG dipped by $30-40/tonne from last Friday to $680-690/tonne CFR CMP, after a deal was fixed at $700/tonne CFR CMP in late morning, traders added.

“Market sentiment is in panic, rather than bearish as we didn’t see any signs that prices will bottom out under current market conditions,” said a trader who deals with Saudi Arabia’s MEG cargoes.

The Chinese domestic prices also dropped sharply today, some traders said. Deals for MEG and PTA were made at yuan (CNY) 5,900/tonne ($864/tonne) ex-tank and CNY6,900/tonne ex-warehouse respectively, down by CNY200-250/tonne from last Friday, they added.

($1 = €0.84 / $1 = CNY6.83)

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By: Becky Zhang
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