FocusAsia PBT may remain stable in near-term on snug supply

16 October 2012 07:06  [Source: ICIS news]

By Heng Hui

SINGAPORE (ICIS)--Spot prices of natural grade polybutylene terephthalate (PBT) in Asia may remain supported at current levels as producers run plants at reduced rates amid continued weakness in demand, market players said on Tuesday.

But sharp declines in contract prices of feedstocks butanediol (BDO) and purified terephthalic acid (PTA) may exert strong pressure for PBT values to fall in the near term, they said.

PBT prices were assessed at $2.10-2.20/kg (€1,617-1,694/tonne) CIF (cost, insurance and freight) NE (northeast) Asia in the week ended 9 October, unchanged for the third consecutive week, according to ICIS.

In the key China market, PBT producers are currently operating their facilities at 70% of capacity to keep prices from falling in the face of weak demand, market players said.

Nonetheless, falling BDO prices – which have stayed below $3,000/tonne since July on a delivered (DEL) Korea basis, and since May on DEL Taiwan basis – are weighing on PBT prices.

BDO contract prices on DEL Taiwan basis stood at $2,350.50/tonne in September, shedding $792/tonne or 25% from $3,151/tonne in April, according to ICIS.

One tonne of PBT requires 500kg of BDO and around 760kg of PTA.

PTA contract prices, meanwhile, were last assessed in September at $1,072.50/tonne DEL Taiwan, down by about 7% or $77.50/tonne from April, according to ICIS.

BDO has the bigger pull on PBT prices as it costs more than twice the value of PTA.

Taiwanese PBT producers are the biggest exporters of the material in Asia. They mainly exports to South Korea, while Japan ships out its PBT products to China.

Asia’s PBT production capacity is currently at about 700,000 tonnes/year, which accounts for 60% of total global output. Most of the PBT producers in Asia are integrated downstream compounders, leading to few import/export trades.

PBT is one type of engineering plastics, and is often regarded as having the best overall performance profile for electronics application, compared with substitute materials such as nylon 6,6, polyethylene terephthalate (PET), polycarbonate (PC), polyacetal (POM).

Digestion of current PBT inventory in China is quite slow, as electronics exports from Asia to the major markets in the West have continued to slow down.

China’s PBT imports in August declined 10% year n year to 11,238 tonnes, while exports of the same production fell a little steeper at 11% to 7,293 tonnes, official data showed. (Please see table below)

Japan, which is a major PBT producing country in Asia and a key exporter of electronics products, saw a 4% year-on-year decline in sales of electronics.

Chinese PBT buyers are preferring to purchase local material, which is priced lower than imports.

Locally produced PBT is currently available at yuan (CNY) 15,700-16,000 tonne ($2,504-2,552/tonne) EXWH (ex-warehouse), which is less than $2.10/kg CFR NE Asia, market sources said.

Most of China’s PBT imports from northeast Asia do not qualify as outright sales as these are concluded between China-based subsidiaries and their parent companies in northeast Asia.

Asian PBT manufacturers include Nantong Xingchen, Jiangyin He Shili, Changchun, Xinjiang tunhe, Yizheng chemical Fibre, Ester Industries and Toray BASF. PBT is used in the manufacture of the housing of electronics, in DVD drive frames, connectors, switch buttons, aerosol valves, laser printer housings and exhaust gas valves.

China's PBT imports and exports

PBT (all grades inclusive of compounded grade)	Jul-12 (tonnes)	Aug-12 (tonnes)	% change m-on-m	Aug-11 (tonnes)	% change yr-on-yr
exports	7,354.9	7,292.9	-0.8	8,198.1	-11.0
imports	13,087.9	11,238.0	-14.1	12,479.8	-10.0

Source: China Customs

($1 = €0.77 / $1 = CNY6.27)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Heng Hui
+65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly