China
The average prices of Chinese domestic purified terephthalic acid (PTA) were largely on an uptrend in the quarter. PTA prices were at yuan (CNY) 8,600/tonne in early September, before dropping to CNY8,100/tonne in end-November. Prices then rose to CNY 9,000/tonne by the end of 2012.
PTA prices began to rise steadily from mid-June onwards, as market players were expecting the weak macroeconomic conditions to pick up in the second half of the year.
However, in mid-September, new PTA plants with total capacity of 5.9m tonnes/year were started up, resulting in an oversupply in the market. This led the prices to plummet. The price decline was only halted in end-November, when downstream end-user demand increased.
Market players have a more optimistic outlook for 2013 and expect the improving global economy to help boost the domestic PTA market. However, demand from the end-user has not strengthened as expected.
Updated to mid-February 2013
Asia
Asia’s spot purified terephthalic acid (PTA) prices bottomed out in early November and were on an eight-week bull run, mainly led by a strong uptrend in PTA futures on the back of positive economic data in China and the US. The spot prices reached $1,191-1,205/tonne CFR (cost & freight) China Main Port (CMP) in the week ended 11 January, up by 10% from early November.
Buying interest increased during the period as buyers acknowledged that PTA prices would hardly fall, given tight spot supply and negative margins because of high feedstock paraxylene (PX) prices.
Around 4m tonnes/year of PTA capacity in Taiwan, South Korea and China were kept idle in December and January because of negative margins. New capacities, totalling 6.7m tonnes/year, started up in 2012 and January 2013 in China were either shut or operated in low rates of below 50% capacity.
The downward correction in PTA futures that began on 8 January dampened market sentiment and discussion prices were lower in the physical market. The spot PTA prices declined to $1,170-1,184/tonne CFR CMP in the week ended 25 January.
The pre-holiday restocking activity ahead of China’s Lunar New Year holiday on 9-15 February lent support to spot prices in early February.
Updated to mid-February 2013