Fibre intermediates

Asia’s purified terephthalic acid (PTA) prices were on a downtrend from early March as slower-than-expected polyester demand in China dampened market sentiment and restricted the purchasing power of polyester makers.

The sluggish demand is considered a result of China’s slower GDP growth.

The outlook is bearish because Asia’s supply growth is expected to outpace demand in 2012.

Five new large-scale PTA start-ups, from 1.4m tonnes/year to 2.2m tonnes/year, are due in China this year.

These will see Asia’s PTA capacity grow by 11.3m tonnes/year or 26% to 54.5m tonnes/year by the end of 2012. Meanwhile, demand across the region is expected to increase by 3.4m tonnes in 2012.

Asia’s PTA producers have been running at reduced rates since the end of last year because of poor margins, which are likely to continue for most of 2012 because of long supply and slower demand growth in China.

In Europe, demand for polyethylene terephthalate (PET) has remained weak, although the peak season should be well under way by now.

Economic uncertainty, a drop in crude oil and a general malaise in demand are leading buyers to remain on the sidelines.

Artlant PTA’s new 700,000 tonne/year plant in Sines, Portugal, will bring length to the market. The plant was operating smoothly from May following difficulties starting up

PTA prices tend to follow the upstream PX trend. US PTA prices are under downward pressure because of soft demand compared with last year and falling Asia PX prices on the back of weak Brent crude futures and worries over macroeconomics.