Asia PBT flat as sellers keep prices firm despite weak demand

Focus story by Jasmine Khoo

SINGAPORE (ICIS)–Spot polybutylene (PBT) prices in Asia are unlikely to snap from stagnation as sellers are keeping offers firm despite weak demand, market sources said on Thursday.

For the past two months, PBT prices have stayed at an average of $1.85/kg CIF (cost, insurance and freight) NE (northeast) Asia, according to ICIS data.

Producers have cited squeezed margins for keeping their offers at current levels, market sources said.

Taiwanese sellers, in particular, are not considering cutting prices, a trader said.

“It is not possible for us to lower prices anymore. We [suppliers] are already working with very squeezed margins,” a northeast Asia-based producer said in Mandarin.

PBT prices have largely been on a downtrend since late last year, according to producers.

Spot prices of PBT have shed 6.6% over a nine-month period, which included weeks of stability, according to ICIS data. PBT prices were at $1.98/kg CIF NE Asia on 3 September 2013.

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

Buyers, on the other hand, are not too keen to procure cargoes – restricting their purchases to immediate needs.

There is expectation among buyers that suppliers would be hard pressed to cut prices to stimulate buying interest amid a supply overhang, market sources said.

In the key China market, the start-up of Fujian Meizhouwan’s 60,000 tonne/year PBT facility in late April has further bloated the country’s PBT capacity at a time of weak demand.

The Chinese market has too much capacity built, according to market players.

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