Polyester feedstock â€“ ethylene and paraxylene and intermediates â€“ purified terephthalic acid and mono ethylene glycol, prices are moving up now. In the week ending 20 February, although the major producer and consumer China was on a long Lunar New Year holiday prices strengthened during the week. It all began with crude oil prices recording three consecutive weeks of gains, both US futures and European Brent. Since end of January, oil prices have gained 13 per cent on news of falling rig counts in US. This led to support to downstream derivative naphtha markets. Naphtha was dearer by 22 per cent during the same period.
During the week, although the number of US rigs drilling oil fell far lesser than expected heating oil demand rose after severe winter cold crimped output at three refineries and prices jumped 6 per cent. Until two weeks ago, March WTI had the highest ever open interest for a front-month. Brent held steady despite data from oil services firm Baker Hughes showing the oil rig count down by just 37, the smallest weekly decline this year. The rigs total itself was at the lowest in more than three years.
Asian ethylene markets were steady as public holidays in China and South Korea limited trading activity while prices were assessed up. Demand for ethylene picked up in Europe in expectation of bullish contract price. Similarly, paraxylene prices rose in Asia although the markets were slow and activities almost negligible. US paraxylene tracked gains in Asia. European paraxylene and orthoxylene prices remain flat as Asian markets were on holidays. Meanwhile, firmer crude and gasoline supported European mixed xylene prices to firm up. Asian ethylene prices were up 7.4 per cent since end-January while paraxylene prices spurted 17.6 per cent.
Asian MEG markets remained flat amid Lunar New Year lull and prices were assessed unchanged on the week. But since January-end Asian MEG prices jumped 9.3 per cent until the week under review. In Europe, MEG prices climbed on constrained supply by lack of imports as markets strengthened and producers swung to EO derivatives. In US, MEG markets saw fundamentals push March contract nominations higher, but spot pricing remained firm. MEGlobal raised its North American MEG benchmark.
PTA prices were relatively slow to rise during the past few weeks and they rolled over in the week of 20 February as activities were limited by holidays in China, South Korea and public holidays in Singapore for the Lunar New Year. In Europe, PTA prices found support from rising downstream PET prices and on firm indications from Asia.
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