FocusAsia PTA makers scramble for term 2012 PX supply

14 December 2011 07:49  [Source: ICIS news]

SINGAPORE (ICIS)--Purified terephthalic acid (PTA) producers in Asia are scrambling to secure sufficient amounts of feedstock paraxylene (PX) through term contracts for 2012, in anticipation of tight supply next year, market sources said on Wednesday.

“I’ve had PTA makers such as Ningbo Mitsubishi Chemical, Hengli Group and Shaoxing Yuandong Petrochemical sending enquiries for term availability for next year. I had to turn them down as I’m already sold out for the first half of 2012,” said a Taiwanese PX maker.

A PTA maker in the south China market is also looking for more PX volumes, said a northeast Asia trading source.

“Almost all my customers are asking for more volumes for 2012,” said a Middle East-based PX maker.

PX supply is expected to be tight in 2012 because of a deluge – close to 10m tonnes/year – of new downstream PTA capacities in China. Only two PX facilities with a combined nameplate capacity of 1.4m tonnes/year are expected to come on line next year.

Term supply contracts for Korean PX for delivery to east China were heard sealed in the early half of this week at a premium of $9/tonne (€6.90/tonne) to 50% Asian Contract Price (ACP): 50% spot CFR (cost & freight) quotes, according to market sources.

Shipments for delivery to south China were heard concluded higher at $12/tonne to published quotes, because of higher freight costs, said market sources.

A term supply contract for delivery to southwest China was heard concluded at a $15/tonne premium to 50% ACP: 50% spot CFR quotes, including a $3/tonne agent commission, but this could not be immediately confirmed.

Negotiations between other producers and end-users are said to be ongoing.

Cargoes of Kuwaiti origin for delivery to China were heard offered at a premium of $15/tonne to published quotes, while bids from Chinese end-users were mostly heard at $5-8/tonne premiums to published quotes.

Kuwait-origin term PX supplies for delivery to India were previously heard concluded at premiums of $8-9/tonne to published quotes, while cargoes bound for Pakistan were sealed at premiums of around $5/tonne to published quotes, according to market sources.

Iranian and Indian PX for delivery to China were heard offered at premiums in excess of $25/tonne to published quotes.

“I think end-users have generally come to the realisation that the market will be tightly supplied in 2012 and they are ready to accept premiums on contracts,” said an industry analyst.

Most 2011 PX contracts for delivery to the key China market were concluded at parity to 50% ACP: 50 spot CFR quotes, ICIS data showed.

($1 = €0.77)

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By: Bohan Loh
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