Asia PBT softens for first time since 10 June on bearish market

SINGAPORE (ICIS)–Asia’s polybutylene terephthalate (PBT) spot prices fell this week after holding steady since 10 June, as sluggish demand and a persistent supply overhang prompted some producers to lower their offers for November-lifting lots.

On 28 October, PBT was assessed at $1.75-1.80/kg CIF (cost, insurance and freight) NE (northeast), down by $0.50/kg from the previous week, according to ICIS data.

“It is not likely to see deals at $1.85/kg CIF NE Asia now, as crude prices have fallen so much. Buyers are mainly keen on buying below $1.80/kg CIF NE Asia,” a northeast Asian producer said in Chinese.

“Upstream conditions, such as in the crude and purified terephthalic acid [PTA] sectors, are not supporting prices, as much as we [producers] would like to maintain our margins,” the producer said.

Crude prices have been falling on concerns over weakening global demand amid continued increase in supply, dragging down the values of some petrochemical products.

“However, I personally don’t  think (PBT) prices will fall too much, as BDO [butanediol] domestic prices in China are still firm due to BDO unit turnarounds,” the northeast Asian producer said.

BDO and PTA are feedstocks for PBT production.

On the supply front, production at China’s PBT plants increased during the week ended 28 October, with operating rates rising to 46% from 35% in the previous week, according to ICIS data.

Going forward, some market players said it is unlikely to see significant rebound in PBT prices as current weak market conditions are expected to persist.

PBT is a thermoplastic engineering polymer used as an insulator in the electrical and electronics industries, and has applications in food-processing machinery.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections