PTA and MEG prices have clearly recovered in the last two trading days in Asia, as producers try to raise their margins after they have been reduced by a jump of paraxylene and ethylene prices, respectively. The polyester chain looks ready to lower its operating rates, if needed, in order to avoid any new fall of its margins. Polyester producers could follow their example.
Polyester intermediate prices have begun clearly rebounding in the past days.
Spot PTA prices in the Far East have risen 5$ per metric ton in two trading days whereas MEG prices were even climbing by 23$ per MT in the meantime.
On China’s domestic market, PTA has gained 280 yuan per MT in two days only whereas glycol prices were rising 200 yuan.
Higher paraxylene prices
Although such increases are far from reversing recent downward trends on PTA and especially on MEG markets, they reflect the need for producers in Asia to raise their prices in order to limit the current fall of their margins.
Paraxylene prices have risen in the last days although crude oil prices were relatively weakened by a series of bearish factors.
Spot PX are still up 3.3% in four weeks by contrast with stagnating PTA prices.
The PX/PTA spread has therefore increased to the detriment of PTA producers.
March ACP has however been settled 30$ higher by two leading producers with their customers of the PTA industry in the Far East.
From $1,050 in February, the settlement price has been raised to $1,080 in March.
PTA producers have therefore raised their offers, benefiting from a rebound in demand from polyester producers who need to replenish their stocks.
With their operating rates still at very high levels by historical standard, PTA producers have ample room for lowering their production levels if needed, in order to support market prices.
The rebound of MEG prices look more fragile, as producers are confronted with ample supplies.
In addition, polyester fiber producers could cut their operating rates if they fail in raising their prices in the coming days.
Source: Emergingtextiles
