23 December 2011 07:10 [Source: ICIS news]
By Bohan Loh
A deluge of new purified terephthalic acid (PTA) plants in
For every tonne of PTA produced, 0.67 tonnes of PX is needed.
The PX supply shortage is expected to spill over into the OX market, as regional makers are likely to tilt production yields in favour of PX. OX is typically a by-product during the PX extraction process and can be re-isomerised to maximise PX yields.
Key OX makers, such as
“The market is tight and will continue to be tight [in] 2012,” said a China-based phthalic anhydride (PA) maker. PA is the downstream product of OX and is used mainly in the plasticiser sector.
Meanwhile, PX supply for term shipments is already starting to tighten as PTA makers were heard trying to secure sufficient quantities of term shipments for 2012. Term contracts for 2012 delivery were heard concluded at premiums to published prices, underscoring the expected tight supply.
Term PX shipments for 2012 for delivery into east China were heard concluded at premiums of $9/tonne (€6.93/tonne) to 50% Asian Contract Price (ACP): 50% spot CFR (cost& freight) quotes, while contracts for delivery into southwest China were heard concluded at premiums of $15/tonne to published quotes over the past three weeks.
Most of these contracts were concluded at parity to published quotes in 2011.
Despite the expected tight supply, most end-users are cautious about over-committing to excessive volumes of PX because of the bleak 2012 economic outlook.
“People are all saying major economies could go into another round of recession and this might hurt demand for polyester films and yarns,” said a China-based PTA trader.
In addition, PTA makers have already reduced their plants’ operating rates at the end of November to December because of squeezed PX-PTA margins.
“If there is no demand for PTA, then there is no reason why we should be operating our plants,” said a southeast Asia-based PTA maker.
($1 = €0.77)
For more information on PX and other chemicals, visit ICIS chemical intelligence
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