30 December 2011 02:17 [Source: ICIS news]
By Becky Zhang
Chinese customs announced on 23 December to eliminate the 5% duty on PTA originating from ASEAN (Association of South East Asian Nations) countries in accordance with the ASEAN-China free trade agreement.
Asean members include Brunei Darussalam,
“More Thai, Indonesian and Malaysian PTA will come to
The plant has been idled for more than four years because of financial problems.
Indorama, the shareholder of Polyprima, has started negotiations with Chinese customers for 2012 term contract since October, the trader said.
The proposed contract formula was discussed at a premium of 4.5-5% to spot PTA prices exempted from anti-dumping duty (ADD), but this attracted few Chinese polyester makers who were bidding at a premium of 2.5-3% to spot PTA prices exempted from ADD, the trader added.
“We are not interested because Indonesian cargoes are in container which will generate additional $5-10/tonne port dealing charges compared with bulk cargoes,” a Zhejiang-based polyester maker said.
Quality was another factor that some polyester makers were worried as the plant has been idled for more than four years.
However, a source from Indorama said Polyprima's product quality is not an issue as Indorama has been engaged in the modification of the plant since they bought 50% of the company's stock.
The plant uses Invista technology which produces high quality PTA products.
The source also said container cargoes will only generate $2-3/tonne additional charges compared with bulk cargoes, and it prevents damages to cargoes during transportation.
Of the Thai producers, only Siam Mitsui who has a ADD of 6% is able to export more cargoes to
Siam Mitsui’s prices may be comparable to Taiwanese PTA prices as Taiwanese cargoes are imposed with a 6.5% import duty, a Shanghai-based trader said.
“Our priority is to meet local demand. We may consider to sell more to
It is also possible for BP to import Malaysian PTA and sell in yuan because Chinese domestic prices are higher than the import parity of US dollar-denominated cargoes, a Zhejiang-based polyester maker said.
The news also had some impact on contact negotiations.
“The overall CFR China prices will be lifted by southeast Asian cargoes next year,” a major Chinese trader said.
However, the pricing mechanism of ASEAN cargoes and the quantities of spot availability are still unclear, market sources said.
“PTA will become oversupplied next year anyway. More ASEAN imports would mean less imports from
ASEAN countries had shipped a total of 555,323 tonnes of PTA towards
The shipments accounted for about 11% of
PTA has last assessed at $1,095-1,115/tonne (€843-859/tonne) CFR China Main Port (CMP) up by $45-50/tonne from the previous month.
($1 = €0.77)
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