MEG, PTA prices rise after China cuts reserve ratio for banks

01 December 2011 04:13  [Source: ICIS news]

SINGAPORE (ICIS)--China’s purified terephthalic acid (PTA) and monoethylene glycol (MEG) prices rose by $10-15/tonne (€7-11/tonne) in the morning after the central bank announced a move to cut the reserve requirement ratio on Wednesday night, market sources said on Thursday.

The People's Bank of China said it will cut the deposit reserve requirement ratio for banks to 21% from 21.5% from 5 December.

Buying ideas for MEG were heard at $1,055/tonne CFR (cost & freight) CMP (China Main Port) against offers at $1,070-1,080/tonne CFR CMP, according to data from ICIS.

Around 4,000 tonnes of deep-sea MEG cargoes for January delivery were heard concluded at $1,070/tonne CFR CMP, while 1,000 tonnes of a December-loading regional cargo was heard sold at $1,060/tonne CFR CMP. Prices rose by $15/tonne from the previous day, according to ICIS.

Selling ideas for South Korea-origin PTA were heard at $1,070/tonne CFR CMP against bids at $1,050/tonne CFR CMP, up by $10-15/tonne from Wednesday, according to ICIS.

“We think this could be a turning point for MEG and PTA prices,” a Zhejiang-based trader said.

This sentiment was echoed by several end-users. However, others said it is too early to tell, as the soft downstream polyester demand at the year-end lull season will continue to exert downward pressure on prices.

($1 = €0.74)

For more pricing intelligence, visit ICIS pricing

By: Becky Zhang
+65 6780 4359

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