SINGAPORE (ICIS)--Southeast Asian phthalic anhydride (PA) import talks yielded limited outcome this week as buy-sell gap grew wider.
Unless demand picks up, it may remain an uphill task to bridge the gap and boost import trade liquidity in the near term, market participants said.
This week, some regional suppliers moved up their asking prices by $10-15/tonne on-week, for volumes available to ship in late December/January to southeast Asia, market sources said.
But these drew “no response from buyers so far”, a trader noted, adding that some buyers were even still asking for deeper discounts.
In sum, buying interest was tepid, with most downstream users already amply covered for prevailing requirements and in no hurry to commence fresh talks until in the new year.
It did not help too that most end-users “are edgy about carrying too much inventory during the year-end financial closure period”, the same trader said.
But from the sellers’ perspectives, margins are extremely squeezed, as feedstock orthoxylene (OX) “did not flinch at all” for close to a month by now, even when PA prices continued to decline, a producer highlighted.
“I would have to bite the bullet and stand by the higher targets now to stem the bleeding in the margins," the same producer said.
Spot availabilities are also limited to begin with, due to curtailed production at various regional plants, including ongoing maintenance closure at a 50,000 tonne/year unit in South Korea.
"Hopefully, this could also help shore up spot talks when buyers start to consider more definitively their January requirements later this month," a trader said.
On 6 December, PA prices were assessed at $790-820/tonne CFR (cost-and-freight) southeast Asia, according to ICIS data.
PA is used to produce plasticisers and unsaturated polyester resins (UPC) which has applications downstream in sectors like construction and automobiles.
Focus article by Ai Teng Lim