In the week ended 17 July, the Asian ethylene markets continued to be hit by weak demand amid ample supply while prices touched a four-month low. The spread between North East and South East was at its widest in 11 months as the two markets saw diverge trend. Asian markers CFR NE was down US$20 a ton while SEA CFR fell US$35 a ton on the week. The ethylene-naphtha spread was wide at US$65 a ton.
In Europe, ethylene spot continued to fall on bearish price expectations following the restart of Shell's 900,000 ton a year Moerdijk cracker. Prices fell Euro11 a ton FD NWE while CIF NWE was down US$32 a ton on the week. In US too, ethylene spot slipped on plant restart as expansion neared completion while weak crude and tumbling downstream PE prices contributed to the decline. Spot ethylene gave back US cent 0.25 per pound FD USG on the week.
Paraxylene prices fell US$31 a ton on the week and US$10 a ton FOB Korea and CFR Taiwan/China on 17 July as crude oil prices fell and downstream demand weakened further. Meanwhile, FCFC shut its plant for turnaround. European paraxylene and orthoxylene prices were down US$29 a ton FOB ARA on the week despite a marginal recovery of US$1 on 17 June driven by a recovery in gasoline prices. In US, paraxylene market activity was minimal and spot tracked falling Asian prices. Production economics were still under tight supply. Spot mixed xylene price also fell week over week under pressure of lower spot gasoline amid weak blending demand. US spot assessments fell US$35 a ton FOB USG while mixed xylene fell US cents 10 per gallon.
Polyester intermediate mono ethylene prices declined in the week of 17 July but the drop was marginal amid talk of traders coming back to the market to procure additional cargoes for end-July to first-half August. Traders believed that a floor was reached after successive decline in spot prices. The CFR Southeast Asia and CFR China fell US$8 a ton week on week while nearby-month cargoes were offered at US$871-872 a ton in China while bonded cargoes were offered at US$885-890 a ton.
Europe spot MEG prices fell Euro40 a ton FCA NWE due to weak demand and falling feedstock. Buyers from coolant market held back buying expecting prices to drop further. In US, MEG spot remained unchanged as market slowed down on softening demand, but remained steady. August prices are expected to drop. US MEG prices were stable on the week at US cents 40 per pound FOB USG.
Meanwhile purified terephthalic acid prices went lower in the week in Asia as demand continued to soften, particularly in China. With downstream polyester markets still recovering and signs of decline in the run rate imminent, PTA markets saw limited trades. The CFR China and CFR Southeast Asia PTA markers fell US$20 a ton week on week while in China, discussions weakened gradually to US$640-650 a ton. Offers for one-day bonded cargoes were at US$690 a ton. In US, PTA downstream users awaited June price which remained unsettled creating uncertainty since paraxylene price declined on the week. European PTA June contract price was assessed at Euro763 a ton FD NWE which remained unchanged while July paraxylene contract price was not settled.
Offers for semi dull chips and super bright chip in China rolled over while those for CDP chip were down US$65 a ton on the upper end of the price range.
Polyester filament yarn markets were thin while producers adjusted offers according to fundamentals, mostly cutting down. In China, POY offers were down at some sellers, and discounts were still available. FDY market was mostly stable but was quiet on tepid sales. Inventory was high, and liquidity remained tight. In India, POY producers pegged offers mostly stable on sluggish sales while market activity remained thin. Downstream buying was done on a need-to basis. In Pakistan, DTY market remained thin on sluggish raw material while downstream buying was quiet. Producers pegged offers largely stable. PFY markets are likely to roll over the weakness in coming week.
Polyester staple fibre markets were largely weak during the week as upstream energy complex and PTA prices fluctuated at low levels. Indian producersâ€™ prices were down and only a few small parcels were traded while in Pakistan PSF market was mostly stable and quiet this week. Indian PSF was cheaper by INR4 a kg at INR82.25 a kg or US$1.30 a kg, down US cents 7 on the week.
Courtesy: Weekly PriceWatch Report
A weekly report covering market and price information on the entire chain of polyester along with online access to daily polyester chain prices.
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