Px-naphtha spread at 2014 peak in Asia, European makers better off

Nitin Madkaikar, 2014-07-01 17:32:00 - Mumbai

News Tags: daily textile prices, naphtha price, Paraxylene price in asia, Paraxylene price in Europe, Paraxylene price in USA, polyester chip price, polyester fibre price, polyester filament price, PTA prices

Mumbai
Px-naphtha spread at 2014 peak in Asia

Asian contract price for paraxylene (Px) once again failed to reach a settlement for June, for the eighth time in the last 10 months. Meanwhile, spot prices have jumped US$145 during June, the second highest monthly gain in 24 months. In June prices surged throughout the month on active short covering for July. They are now at their 2014 peak.

The development in Px markets has led to widening of spread between Px and feedstock naphtha, both in Asia as well as in Europe too. In June, while spot prices for Px averaged US$1,347 a ton FOB Korea, the Japan CFR naphtha averaged US970 a kg, implying a spread between the two of US$376.50 a ton. The spread is now comfortable compared to a typical breakeven spread of US$230-250 a ton for Asian Px producers.

Asian Px prices gained US$145 over May while naphtha was up US$18. The spread in April had narrowed to US$247 a ton. In similar comparison, the spread in Europe was US$480 a ton in June and US$356 in April. Thus, European makers are benefiting from Asian surge and are also better placed in margins.

Asian PX market was on a downtrend since the beginning of 2014 due to a sharp buildup in regional supplies as purified terephthalic acid producers in China reduced their plant operations facing weak demand and negative margins.

Downstream PTA markets overwhelmingly supported the feedstock to rise. June saw spot PTA prices climb closer to US$1,000 a ton mark with CFR China closing the month at US$995 a ton following an intentional move by producers to control production to improve margins. In the drive to lift PTA margins, major producers in China seem to have overlooked the fact that the Px makers were not bonded to keep their prices flat but can 'force’ up PTA makers.

Major PTA producers have announced that they will not deliver without a revision of the contract terms, such that the final PTA price would be referenced to the Px cost plus spread, and any spot average would not be referenced unless it turned out to be higher than the reference to Px costs.

In Europe, contract price for Px for May rolled over at Euro900 and June was provisionally settled at Euro930, influenced by the spike in Asia. While supply was not an issue, since many PTA plants were off-line for shutdowns or due to technical snag. After extensive discussions US April contract price for Px was at a split of US$ cents 61.5-63.5 per pound. May was settled at US cents 63 cents. There is no number for June published and discussions were protracted.

It is also true that PTA makers in their attempts, whichever, to recover margin should also consider the implication of heir move on upstream and downstream markets and the market outlook of the entire polyester chain.
Courtesy – YnFx Weekly PriceWatch Report and Daily Textile Prices service

0

News Tags: daily textile prices, naphtha price, Paraxylene price in asia, Paraxylene price in Europe, Paraxylene price in USA, polyester chip price, polyester fibre price, polyester filament price, PTA prices

Mumbai
Px-naphtha spread at 2014 peak in Asia

Asian contract price for paraxylene (Px) once again failed to reach a settlement for June, for the eighth time in the last 10 months. Meanwhile, spot prices have jumped US$145 during June, the second highest monthly gain in 24 months. In June prices surged throughout the month on active short covering for July. They are now at their 2014 peak.

The development in Px markets has led to widening of spread between Px and feedstock naphtha, both in Asia as well as in Europe too. In June, while spot prices for Px averaged US$1,347 a ton FOB Korea, the Japan CFR naphtha averaged US970 a kg, implying a spread between the two of US$376.50 a ton. The spread is now comfortable compared to a typical breakeven spread of US$230-250 a ton for Asian Px producers.

Asian Px prices gained US$145 over May while naphtha was up US$18. The spread in April had narrowed to US$247 a ton. In similar comparison, the spread in Europe was US$480 a ton in June and US$356 in April. Thus, European makers are benefiting from Asian surge and are also better placed in margins.

Asian PX market was on a downtrend since the beginning of 2014 due to a sharp buildup in regional supplies as purified terephthalic acid producers in China reduced their plant operations facing weak demand and negative margins.

Downstream PTA markets overwhelmingly supported the feedstock to rise. June saw spot PTA prices climb closer to US$1,000 a ton mark with CFR China closing the month at US$995 a ton following an intentional move by producers to control production to improve margins. In the drive to lift PTA margins, major producers in China seem to have overlooked the fact that the Px makers were not bonded to keep their prices flat but can 'force’ up PTA makers.

Major PTA producers have announced that they will not deliver without a revision of the contract terms, such that the final PTA price would be referenced to the Px cost plus spread, and any spot average would not be referenced unless it turned out to be higher than the reference to Px costs.

In Europe, contract price for Px for May rolled over at Euro900 and June was provisionally settled at Euro930, influenced by the spike in Asia. While supply was not an issue, since many PTA plants were off-line for shutdowns or due to technical snag. After extensive discussions US April contract price for Px was at a split of US$ cents 61.5-63.5 per pound. May was settled at US cents 63 cents. There is no number for June published and discussions were protracted.

It is also true that PTA makers in their attempts, whichever, to recover margin should also consider the implication of heir move on upstream and downstream markets and the market outlook of the entire polyester chain.
Courtesy – YnFx Weekly PriceWatch Report and Daily Textile Prices service

0

News Tags: daily textile prices, naphtha price, Paraxylene price in asia, Paraxylene price in Europe, Paraxylene price in USA, polyester chip price, polyester fibre price, polyester filament price, PTA prices

 
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