14 October 2010 05:53 [Source: ICIS news]
By Bohan Loh
Valuations for spot PX for November delivery surged more than $150/tonne (€108/tonne) over the past week to reach a 25-month high of $1,265-1,275/tonne CFR Taiwan and/or China Main Port (CMP), based on ICIS data.
“Current prices have gone beyond my initial expectations,” said a key producer in
“I think there could be some traders trying to cover short positions,” he added.
Production troubles at the 900,000 tonne/year PX facility of CNOOC-Kings in
CNOOC-Kings had difficulties producing on-spec material at the facility, and had to reduce contractual volumes to customers, they said.
PX prices were also firmly supported by strong values of its downstream purified terephthalic acid (PTA) market, they said.
The bulk of PX and PTA output in the region goes into textile production.
Benchmark PTA prices were also trading at 25-month highs of $1,025-1,045/tonne CFR CMP, as end-users scrambled for material after the week-long National Day holidays in China. The Chinese market was on holiday from 1-7 October for National Day.
“I don’t think the market is very tight at the moment. However, there remains some traders trying to cover short positions and this is driving the market up,” said a regional PX trader.
Despite the prevailing bullishness in the market, the price uptrend for PX could be short-lived, as most end-users have already secured sufficient material for the fourth quarter via additional contractual arrangements, market sources said.
“Demand from end-users haven’t been fantastic. It could be just traders’ speculation currently,” said a China-based producer.
($1 = €0.72)Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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