European April PTA contract prices drop in line with PX

19 April 2013 23:59  [Source: ICIS news]

LONDON (ICIS)--European April purified terephthalic acid (PTA) contract prices dropped on Friday in line with the surprisingly sharp decrease in upstream paraxylene (PX).

Downstream polyethylene terephthalate (PET) producers are now paying between €880-910/tonne ($ 1,143-1,182/tonne) FD (free delivered) NWE (northwest Europe) for PTA.

Smaller buyers of PTA are held at prices closer to €1,000/tonne, they said.

PTA plants have been operating below capacity in order for manufacturers to stave off the effects of an oversupplied market.

There are repeated comments from industry sources regarding plants stopping, restarting and stopping again, alongside other reports of export activity.

"For sure they are not running full capacity," a regular PTA buyer said, echoing comments made by others.

The uncertainty surrounding the future of Artenius' PET production due to debt issues has served to compound the negativity in the PTA market.

Asia, the dominant market, has witnessed PTA producers suffer a series of margin losses caused by almost incessant increases in upstream PX, so a drop in the cost of production now offers some respite.

"[Asian PTA] suppliers are suffering and trying to recover a bit of something [in order] to survive, from the PX decrease…It is now or never for margins. They are trying to get a bit of relief," a European downstream buyer acknowledged.

The price of PET decreased again this week because of a drop in production costs.

Producers are refusing to go down further at this point on the offer price. This is more a matter of producers not panicking, due in part to their stock position, as opposed than a significant increase in demand.

($1 = €0.77)

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By: Caroline Murray
44208 652 3214

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