China’s PTA producers settle March contracts 3% lower

26 March 2012 11:49  [Source: ICIS news]

SINGAPORE (ICIS)--Most producers of purified terephthalic acid (PTA) in China have settled their March contracts at yuan (CNY) 9,150-9,200/tonne ($1,452-1,460/tonne), about 3% lower compared with February contracts, market sources said on Monday.

February PTA contracts in the domestic Chinese market were at CNY9,450/tonne, they said.

Market sources attributed the decline in PTA contract settlement prices to the decreasing spot values of feedstock paraxylene (PX), as well as weak downstream demand.

Spot PX prices fell more than 5% from the start of the month to $1,560-1,563/tonne FOB (free on board) Korea on 23 March, according to ICIS.

Domestic PTA prices in China stood at CNY8,700 CIF (cost and freight) east China on Monday, according to Chemease, an ICIS service in China.

Zhejiang Yisheng Petrochemical, one of the major PTA producers in China, settled its March PTA contract at CNY9,200/tonne on Friday, a company source said.

Other major PTA producers such as Sinopec, Xiang Lu Petrochemical, Zhejiang Yuan Dong Petrochemical and Oriental Petrochemical have fixed their March contracts at CNY9,150/tonne, company sources said.

Most domestic producers are running their PTA facilities at an average of around 85-90% of capacity, market sources said.

“We plan to cut operation rate in April, because of the weak demand from the downstream polyester users, as well as the margins were squeezed by high feedstock paraxylene (PX) prices,” said one of the producers.

Additional reporting by Thompson Qian

($1 = €0.75 / $1 = CNY6.30)

By: Yolanda Chen

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