FocusAsia PBT consumption slows; China to export excess supply

01 August 2012 06:51  [Source: ICIS news]

By Heng Hui

Asia PBT consumption slows; China to export excess supply SINGAPORE (ICIS)--Asia’s demand for natural grade polybutylene terephthalate (PBT) in Asia will continue to grow but at a more moderate pace over the next two years, with China looking to ship out its excess supply, industry sources said on Wednesday.

China is a huge consumer of natural grade PBT, which is usually compounded with other ingredients such as glass fibre for use in electrical end-products that are mostly meant for exports.

But demand for Asian-made goods is waning because of the raging eurozone debt crisis and continued weakness in the US economy, leading to a slowing down of manufacturing activities in the region, and China is no exception.

China, the world’s second biggest economy, is expected to post a slower growth of 7.5% this year from 9.1% in 2011 and 10.4% in 2010.

PBT demand grows in line with the general economic expansion, which has been slowing down in most countries in the last few years – a trend that may continue into 2013, industry sources said.

The material is used in casings of electronics, frames of DVD drives, connectors, switch buttons, aerosol valves, laser printer housings and exhaust gas valves.

“We are no longer interested in selling to China since the market price is so low,” said a Northeast Asian seller.

Some traders said based on current domestic values at around yuan (CNY) 14,500/tonne ($2,280/tonne) ex-tank, it would be possible to export natural grade PBT for a cheap as $2.00/kg FOB (free on board) China.

A Chinese producer said it could export PBT at $1.96-2.00/kg FOB China.

Base PBT grade, or more commonly referred to as neat resin, was discussed this week at $2.05-2.20/kg CIF (cost, insurance and freight) NE (northeast) Asia, based on buying and selling notions, market sources said. Import prices of the material widely vary, depending on origin.

Imported material from northeast and southeast Asia was reportedly sold in China at $2.2-2.3/kg CIF (cost insurance and freight) China, around $0.15/kg more expensive than locally manufactured material.

Electronics-heavy economies such as India and South Korea could be the anchors for growth in the region’s PBT demand, industry sources said.

State-owned Indian Oil was reported to be considering building a PBT plant to serve the domestic market, which has a strong appetite for the material.

The south Asian country is estimated to import about 15,000 tonnes of PBT annually, market players said.

South Korea, meanwhile, is a net importer of PBT. Data from the Korea International Trade Association (KITA) showed that the country imported 5,350 tonnes of natural and compounded grades of PBT in May 2012, while exports were at 2,009 tonnes.

PBT consumption will remain supported by continued increase in Asia’s electronics exports, although the pace of growth is expected to continue decelerating well into next year, market players said.

Asia can produce around 700,000 tonnes/year of PBT, accounting for more than 60% of the global capacity.

ICIS is launching the PBT report in mid-August and will be assessing the India and northeast Asia prices. PBT is a type of engineering plastics that is regarded as having the best overall performance profile for electronics compared with as nylon 6,6, polyethylene terephthalate (PET), polycarbonate (PC), polyacetal (POM).

Asian PBT manufacturers include Nantong Xingchen, Jiangyin He Shili, Changchun, Xinjiang Tunhe, Yizheng chemical Fibre, Ester Industries and Toray BASF.

($1 = €0.81)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
Request a free ICIS sample report for the latest prices and development in the Asian petrochemical markets

By: Heng Hui
+65 6780 4359

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