31 December 2012 07:34 [Source: ICIS news]
SINGAPORE (ICIS)--Prices for phthalic anhydride (PA) in east China are likely to rise in early-to-mid January as producers slash operating rates in light of high feedstock orthoxylene (OX) prices, market sources said on Monday.
PA prices were assessed at yuan (CNY) 11,300-11,400/tonne ($1,811-1,827/tonne) ex-tank east China on 28 December, while its feedstock OX prices were assessed at 11,700-11,800/tonne ex-tank east China, according to Chemease, an ICIS service in China.
“As PA prices rose sharply in the first half of December on the back of surging feedstock OX prices, prices are expected to increase at the start of 2013 as they are still lower than OX prices,” one trader based in east China said.
Most PA producers were running their operating rates low because of high feedstock costs, while some are running with no inventories, the trader said.
PA producers Sinopec Jinling, Shanghai Coking & Chemical, and Changzhou Yabang Chemical have each shut a 50,000 tonne/year unit to keep operating costs down, another trader said.
All three firms each operate two 50,000 tonne/year units in east China.
PA producers were unwilling to sell low-priced cargoes due to high costs, according to the trader.
Meanwhile, Sinopec was rumored to be raising its OX list prices from 1 January, another trader added.
Moreover, demand from the downstream dioctyl phthalate (DOP) sector is expected to recover slightly in early 2013, a DOP industry source said.
However, downstream demand will soften in mid-to-late January ahead of the coming Chinese Lunar New Year holidays, which will make PA prices volatile amid high feedstock OX prices, the DOP industry source added.
Additional reporting by Yoyo Liu, Cindy Qiu
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