28 January 2013 08:00 [Source: ICIS news]
SINGAPORE (ICIS)--China's contract price for purified terephthalic acid (PTA) in January was settled at yuan (CNY) 9,200/tonne ($1,479/tonne) on 25 January, up by CNY450 from December’s level, industry sources said on Monday.
The contract price was announced by major domestic PTA producers including Yisheng Petrochemical, Xianglu Petrochemical, Shaoxing Yuandong Petrochemical, Sinopec, BP Zhuhai and Hengli Petrochemical on Friday.
While the January settlement price is higher than December’s price of CNY8,750/tonne, domestic PTA producers are still facing negative margins because of firmer feedstock paraxylene (PX) cost, a source at a major production facility said.
Sinopec has set its January contract settlement price for PX at CNY12,500/tonne in the previous week.
Based on the current PX price, the production cost of PTA is estimated at around CNY9,300/tonne, which is CNY100/tonne higher than the settlement price for January, according to the source.
Furthermore, with PX prices expected to remain firm in the coming months, market players said this will increase the cost pressure on PTA prices.
As a result, PTA prices are not expected to fall in the near term, a source from another major PTA producer said.
($1 = CNY6.22)
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