Market and product

Production of purified terephthalic acid (PTA) in Asia will be limited during the Lunar New Year holidays, but weak demand will keep prices stable despite the expected cut in supply, industry sources said on Tuesday.

Bids were quoted on Tuesday at $525-530/tonne CFR (cost and freight) China, with offers at $550/tonne CFR China.

On 22 January, prices were assessed down by $12-17/tonne at $533-543/tonne CFR China and at $551-561/tonne CFR India, according to ICIS data.

Prices on a free-on-board (FOB) northeast (NE) Asia basis were assessed at a $3/tonne premium over CFR China prices, due to administrative and logistics costs for exports from China, the data showed.

Some producers in the region are looking at cutting run rates further at their plants during the Lunar New Year holidays in early February.

In China, Yisheng Petrochemical – the biggest PTA producer in the country – has reduced production at its running PTA units to 90% of capacity. Its 2.2 m tonne/year No 4 PTA line in Ningbo remains shut for maintenance.

Ningbo Mitsubishi Chemical, meanwhile, is targeting to resume production its 685,000 tonne/year PTA line in end-January, although the actual restart date is not confirmed.

In South Korea, two producers have shut their plants amid an overcapacity.

Hanwha General Chemical shut its 450,000 tonne/year No 3 PTA line in Ulsan this week, a source with knowledge of the matter said.

Its 450,000 tonne/year No 2 PTA line in Ulsan and 700,000 tonne/year No 4 PTA line in Daesan will continue to run at 80-90% of capacity.

Samnam Petrochemical’s 350,000 tonne/year No 2 PTA line in Yeosu was taken off line this month, with no definite restart date. Its 550,000 tonne/year No 3 and 550,000 tonne/year No 4 qualified terephthalic acid (QTA) lines are running normally.

There continued to be some demand in the market, although appetite was not vigorous, market sources said.

“There could continue to be some limited buying by end-users to build up stock levels before the Lunar New Year,” a producer said.

The Lunar New Year falls on 8 February. China will be on holiday on 7-13 February, while other countries in southeast and northeast Asia will celebrate the festivity for up to three days.

“However, the overall buying appetite is expected to be extremely thin in the market from now on,” the producer said.

PTA prices fell last week on thinning demand ahead of the holidays and declining feedstock costs.

While regional PTA output has been reduced by the recent shutdowns, the overall market supply remains ample, market sources said.

In the key China market, inventory levels are estimated at 900,000 to 1m tonnes, and are expected to continue climbing in the near term, industry sources said.

Spot PTA trades in India remained scarce, with polyester producers limiting their offtakes to contract volumes, market sources said.

A major producer has restarted its PTA lines after a turnaround. No plant shutdowns are expected in India this week.