Paraxylene prices have suddenly plunged in the last week in Asia, over larger supplies and weaker demand. PTA producers could now lower their price offers on their turn, as polyester fiber prices are alredy declining this Monday in China.
Polyester chain prices have begun more radically moving in the last week, amid ample supplies and weak demand.
Most important, spot paraxylene prices have unusually plunged, losing more than 102$ this Monday from a week earlier, or 9.7%.
In the meantime by contrast, crude oil prices have continued rallying over the effective implementation of US ban on Iranian oil exports, from May 2nd.
Low inventory levels have also supported oil prices.
The paraxylene market has ignored the rebound in crude oil prices.
The sharp decline of PX prices is due to a surprising rise of supplies in the coming period.
Cargoes are also expected in the coming period in the Far East, therefore depressing May prices.
In China, Hengli’s new PX facility of 4.5 million MT per year will be launched in the coming months.
A seasonal fall of demand from bottle PET producers is also behind the sharp decline of paraxylene prices.
As a result, margins have plunged at PX plants in China, as reflected by our below chart.
Operating rates have been consecutively lowered, from 91% on April 11th to 85% on April 19th.
Margins in the meantime have surged at PTA plants, as price offers were far from following the sharp decline of raw material costs.
Operating rates have slightly decreased, over a series of maintenance operations in China, therefore supporting PTA prices.
PTA futures have remained relatively firm in the meantime.
Demand is however weak from polyester fiber producers who are currently forced to lower their prices.
DTY prices were falling more than 2% this Monday in China from their level last Friday.
Benefiting from large margins, PTA producers could now prefer cutting their prices rather than lowering their operating rates.
As a consequence, polyester prices could slide to lower levels before the beginning of the MayDay holidays.
Source: Emergingtextiles
