SINGAPORE (ICIS)--Asia’s phthalic anhydride (PA) import prices remain in the doldrums as wider discounts failed to uplift buying.
With consumer confidence still undermined by the incessant US-China tensions, prospects of any near-term recovery for PA demand seem dim, market participants said.
In southeast Asia, import PA prices started declining in September, and by end-November, average prices have lost more than 10% to hit $805/tonne CFR (cost and freight) SE (southeast) Asia.
The last time CFR SE Asia prices hovered at the $800/tonne mark was in September 2016, ICIS data shows.
Trades into China and India have suffered similarly, with CFR China Main Port and cost-insurance-freight (CIF) India prices down by 12% and 10% respectively in the same window.
“Basically, demand was in shambles,” a seller lamented, adding that “no matter how much discounts I conceded, buyers just were not enticed”.
For much of the year, downstream factories not only kept operations low, but also shun buying raw materials like PA just to hold in stock.
“There is just so much uncertainties, as long as macro issues like the US-China trade conflicts are not resolved,” an end-user said.
“Things could turn overnight, and I do not want to be caught with high stocks,” he added.
Sellers have continually moderated their sales targets, in a bid to chase deals and keep some volumes moving to some extent.
“I have hit bottom, and really cannot price lower. I bleed more as I dish out fresh discounts,” a regional producer said citing firm feedstock orthoxylene (OX) prices during November.
If demand does not improve, and upstream cost pressures still unyielding, PA producers may be left with few alternatives but to cut output further, so as to contain surplus and also losses, market players said.
Focus article by Ai Teng Lim
Photo: A container ship at the port of Qingdao in Shandong province, China. (Source: Sipa Asia/Shutterstock)
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