12 October 2012 23:59 [Source: ICIS news]
LONDON (ICIS)--October contract prices for European purified terephthalic acid (PTA) have rolled over at €954-979/tonne ($1,239-1,271/tonne) FD (free delivered) NWE (northwest Europe), following the rollover in upstream paraxylene (PX) costs this month, industry sources said on Friday.
European October contracts for feedstock PX were steady at €1,190/tonne FD NWE, despite earlier indications that an increase was possible.
Sources said PTA prices had followed feedstock movements in October, rolling over from the previous month. September PTA prices were calculated based on raw material movements.
"Given the contractual nature of most of the PTA sales and the lack of spot activity, then there really is no other option than for prices to follow PX," a producer said.
A large buyer said it was "happy" with the current price for PTA, although it added that the PX price remained too high in Europe.
Downstream polyethylene terephthalate (PET) producers pay formula prices that are linked to the upstream PX pass-through. A conversion fee of around €170/tonne has been the norm for 2012, although down to €145/tonne and up to €180/tonne or even higher has also been mentioned over the course of the year. The fee for 2013 is a matter for discussion in the fourth quarter.
The PTA market is long, not just in Europe, but globally. One trader added that this was only likely to get worse given that new capacity would be coming onstream in Europe and that downstream markets were struggling as a result of the economic downturn and increased competition from imports.
A producer said, however, that the European industry was capable of being competitive.
($1 = €0.77)
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