04 November 2010 07:07 [Source: ICIS news]
(adds supply conditions, market comments)
By Becky Zhang
Recent outages at regional plants, along with positive news on the US economy overnight, spurred buying activities that pushed PTA futures to breach the 4% cap set on daily swings in values in just the first two hours of trade at the Zhengzhou Commodity Exchange, they said.
In the spot market, domestic PTA prices in
Market players were surprised by the sudden and sharp increase in prices, notwithstanding the supply tightness in the PTA market.
PTA supply was expected to remain tight in November due to low operating rates at plants, along with outages and maintenance shutdowns at a number of Chinese and Taiwanese PTA facilities.
Zhejiang Yuandong Petrochemical had to cut its contracted PTA volumes with customers by half as it was having mechanical problems at its 600,000 tonne/year PTA plant in Shaoxing.
Meanwhile, Zhejiang Yisheng and Jialong Petrochemical shut their 550,000 tonne/year No 2 unit and 600,000 tonne/year plants, respectively, early this week for maintenance. The plants’ turnaround would last a week.
Meanwhile, some Korean producers were keen to cut some of their contract volumes, and keep more material for spot sales in view of current high prices, market sources said.
“Our November contract volume has been cut by 25-30%,” said a trader dealing with Korean cargoes.
Speculators may be driving up PTA prices because of the strong spikes in cotton prices. Cotton futures on the Zhengzhou Commodity Exchange were up 11% week on week at yuan CNY29,715/tonne on Wednesday’s close.
Most PTA output goes into production of polyester fibre, which could be a good substitute for cotton.
($1 = CNY6.68)
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