18 March 2011 05:11 [Source: ICIS news]
By Becky Zhang
Quake-related disruption to Japan's PX exports for a week now aggravated the tight supply in the market, causing price spikes that tugged at PTA values.
Spot PX prices surged to their highest level on record at $1,815/tonne (€1,289/tonne) CFR Taiwan and/or CMP on Wednesday, as demand from PTA producers surged following a force majeure declaration on PX supply by
Three of the company’s PX facilities, with a combined capacity of 950,000 tonnes, have been knocked down by a massive quake and tsunami that hit the northern part of the country on 11 March.
Meanwhile, spot PTA prices soared to a 16-year high of $1,500-1,517/tonne CFR (cost and freight) China Main Port (CMP) on Thursday, according to ICIS.
Prices will likely continue their uptrend in the coming weeks, as supply will become tight amid a slew of turnarounds in
PTA output will be cut by about 264,000 tonnes, thereby cutting the requirement for feedstock PX by 177,000 tonnes, based on industry estimates.
“The shutdowns can calm down bullishness in PX prices, but will, meanwhile, exacerbate supply shortage of PTA,” said a major regional trader.
China’s Xianglu Petrochemical informed its customers on Wednesday that it would bring forward a 15-20 days of turnaround at its 1.65m tonne/year plant, in the southern Fujian province, to the end of May, instead of the second half of the year. The company will cut supply to contract customers by half in June because of the shutdown, market sources said.
Yisheng Dahua Petrochemical now intends to shut its 1.5m tonne/year plant at
Among the other PTA plants due for turnarounds in China next month are Fujian Jialong Petrochemical’s 600,000 tonne/year Xiamen plant, Mitsubishi Ningbo’s 600,000 tonne/year line, BP Zhuhai’s 500,000 tonne/year No 2 unit and Zhejiang Yuandong’s 600,000 tonne/year No 2 unit.
A Chinese trader said that the PTA producers’ reaction to the tight PX supply and high prices “seems to be overdone”, adding that a margin exceeding $180/tonne can still be generated at current PX costs.
This was higher than the $153/tonne average margin recorded in 2010, he said.
Meanwhile, PTA demand is expected to strengthen in the coming months with around 2m tonnes/year of new downstream polyester capacities starting up.
Insufficient PTA supply might restrict polyester production during the traditional peak demand season in April-May, said a polyester maker.
PTA is primarily used in polyester production, with polyester fibre and yarn consuming over 75% of
($1 = €0.71)
Click here for the latest news on the
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections