17 August 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--European July purified terephthalic acid (PTA) reference prices fell to €824–849/tonne ($1,017–1,048/tonne) FD (free delivered) NWE (northwest Europe) because of the upstream paraxylene (PX) price drop from June to July, sources said on Friday.
PTA values dropped from June to July by the equivalent of 67% of the PX decrease in the same month. With conversion fees for large customers in the polyethylene terephthalate (PET) industry of €145–180/tonne, this brought July PTA to €824–849/tonne. This is according to ICIS calculations as well as commentary from the market.
Requirements for PTA had been very low for months as the PET industry struggled to pick up due to poor economic conditions and bad weather affecting PET bottle sales.
PET sales picked up from July as stocks were depleted and prices were bottoming out. A lack of imports means buyers are now reliant on domestic PET and this could last into September. Nevertheless, fundamentally the markets remain lacklustre overall because of the economy and sources still talk about there being a lot of PTA around.
"Demand is not there… There is a lot of PTA in the market," said a buyer.
There are already indications that upstream PX is looking firm going into September, and industry sources are expecting this to have an impact on downstream pricing for products such as PTA and its main outlet, PET.
The €135/tonne August hike in the PX price should push PTA up to €914–939/tonne this month, but so far there has been limited commentary from the market about this.
($1 = €0.81)
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