By Malini Hariharan
The paraxylene (PX)-purified terephthalic acid (PTA) market appears to be bearing the brunt of the Japanese earthquake and tsunami. Spot supplies of PX have dried up following the shutdown of three Japanese plants with a total capacity of 950,000 tonnes/year.
Spot PX prices surged to a record high $1,815/tonne CFR Taiwan last week as JX Nippon Oil & Energy declared a force majeure on supplies. PTA prices also rose to a 16-year high of $1,500-1,517/tonne CFR China main port, reports ICIS news.
And further price hikes are likely as a number of PTA plants in China and Taiwan are due to shut down for maintenance in the coming weeks. Additionally, some Chinese companies are planning to bring forward turnarounds following a tightening of PX availability from Japan.
Meanwhile, PTA demand is expected to strengthen in the coming months with around 2m tonnes/year of new downstream polyester capacities starting up in China, writes my colleague Becky Zhang.
She estimates that 1.9m tonnes/year of PTA capacity in Northeast Asia is due to shut down in March and 5.35m tonnes/year of capacity in April.
With cotton prices still running at record highs there appears to be room for polyester to digest the latest price increases. And with peak textile production season approaching, transaction volumes at the China Textile City in Shaoxing rose to 5.1m-5.2m metres/day early last week.
The only concern appears to be the slow buying in the Chinese polyester market as inventories have yet to be depleted.