Some Chinese major PTA producers delay Nov contract settlement

27 November 2013 08:49  [Source: ICIS news]

SINGAPORE (ICIS)--Some Chinese major PTA producers such as Yisheng Petrochemical and Xianglu Petrochemical have delayed their November contract settlement in light of poor margins, an end-user source said on Wednesday.

The contract settlement is usually announced around the 25th of every month, the source added.

The reason of the delay was considered to be the negative profits of PTA production in recent two months, a domestic PTA producer said.

On the other hand, Sinopec settled its November PTA contract price at yuan (CNY) 7,550/tonne ($1,240/tonne) on 22 November, which was down by CNY300/tonne compared with its October contract price.

Hengli Petrochemical and Mitsubishi Ningbo announced their November PTA contract settlement price at CNY7,650/tonne on the same day, and BP Zhuhai settled at CNY7,625/tonne on 25 November, according to Chemease, an ICIS service in China.

However, the domestic producer said that these settlement prices would result in a loss for PTA producers in November, since the feedstock PX prices did not decrease as fast as those of PTA.

Domestic PX contract was settled at CNY10,400/tonne in November, while the imported PX contract has yet to be concluded, although the spot prices were at $1,390-1,400/tonne (€1,029-1,036/tonne).

With the current feedstock prices, the cost of PTA production was estimated to be over CNY7,700/tonne, according to a market player.

China’s domestic PTA prices decreased to CNY7,225/tonne EXWH (ex-warehouse) on 26 November, down by nearly CNY400/tonne from early October, according to Chemease.

The settlement contract prices mentioned above are based on three-month acceptance.

($1 = CNY6.09 / $1 = €0.74)

By: Angeline Zhang

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