Sign in | Join free

Asia pta may extend falls as demand from china textiles slows

Asia pta may extend falls as demand from china textiles slows Source: icis
Date: 02-07-2010
Visits: 259
Very Poor

Asian purified terephthalic acid (PTA) prices may lose further ground this month on weaker demand, due to production cutbacks at a major downstream market - China’s textile industry, market sources said on Friday.

PTA has a strong application in polyester production, with the textile industry consuming a huge portion of the global polyester fibre output.

Most textile producers had stocked up on raw materials in June, and may not be as active in the market this month, industry sources said.

Restocking of polyesters in June provided the weak PTA market some respite, with spot values edging up to $835-860/tonne (€668-688/tonne) CFR (cost and freight) CMP (China Main Port) at the end of the month, before sinking again to around $830-855/tonne CFR CMP this week, based on ICIS data.

“We expect polyester demand to decrease in July after most textile factories [finished] stocking up enough raw materials in June,” the polyester maker.

Over the past three months, PTA prices had shed a total of $125/tonne or 13%, as general concerns about the eurozone debt crisis and falling crude prices gripped the petrochemicals market.

Expectations that crude prices have bottomed out triggered the restocking of polyesters, pushing inventory levels to 10-15 days against the normal one-week stock levels, market sources said.

“Textile plants had been purchasing polyester yarns actively in June as there was a need for them to replenish depleted inventory at the time when they sensed crude prices were about to bottom out,” said a Jiangsu-based polyester maker.

But polyester and textile production could be curtailed due to restrictions on electricity use of industries in Zhejiang province during the summer months of July to September, and could exert a strong pressure on PTA prices to market, industry sources said.

Zhejiang accounts for around 60% of China’s total polyester production.

“The electricity savings scheme in Zhejiang province may not have much impact on polyester and PTA plants, but will definitely bring down the operation at local textile plants due to their more flexible nature,” the Zhejiang polyester producer said.

The downstream textile market may have started to soften, said the producer,citing that his company’s sales-to-output ratio had dropped to 70-80% on Friday from 100-150% for most of June.

like 279 Unlike 31
Users Comments
No comments to display
Are you sure you want to delete this comment.
Add your comment
User Name:
Email: Will not be published
Rate This article:
Comment:
Maximum 3500 characters
Your name
Your email address
Your friend email address
  • /images/ourservices/125-600/pricetrend.jpg
  • /images/ourservices/125-600/product.jpg
  • /images/ourservices/125-600/videos.jpg
Suntex Asia Limited
32341 Users
have already joined suntexasia.com. Shouldn't you?
Full registration will provide you access to all our free services. It takes only one minute and it is free Go here
Quick registration (it's free)
Accesss to some of our free services
Select membership
Full Name
User Name
Email
Password
Enter the code
pcbco
(Note: If you can't read the letters, reload the page to generate a new one.)
terms and conditions
 
Members Login
Already registered
Email
Password
Forgot your password
golden fees
Enter your e-mail address
Choose your room