Note to subscribers: ICIS pricing is considering normalising the CFR CMP quote in the Phthalic Anhydride (Asia Pacific) weekly report. Southeast Asian cargoes that are exempt from import tariffs will be normalised to the 6.5% basis. Please send comments or queries to mailto:suyeen.cheong@icis.com suyeen.cheong@icis.com
Note to subscribers: ICIS pricing is considering adding a CFR South Asia quote to the Phthalic Anhydride (Asia Pacific) report to reflect spot trades done into that region. Please send any comments or queries to mailto:suyeen.cheong@icis.com suyeen.cheong@icis.com
PA prices rose on strong feedstock
Asian phthalic anhydride (PA) spot prices continued firming this week as rising feedstock orthoxylene (OX) costs resulted in firmer fixtures and buy-sell discussions for August shipment.
Regional producers said it was challenging to raise their prices as demand from the downstream plasticiser and resin sectors was still weak. Sellers had no choice but to pass on the higher costs down the supply chain.
In addition, supply is tighter because of reduced production rates at several plants in the region. Many PA producers were forced to reduce operating rates at their facilities by 20-50% in recent months because of mounting losses and poor economics.
A key northeast Asian supplier was heard to withhold its offers and decided not to offer any material because it will incur a loss as OX costs are higher than PA prices.
The majority of offers met strong resistance from buyers. Traders and end-users retreated to the sidelines to monitor the market situation prior to committing to fresh parcels amid uncertainty in the price outlook.
Buyers are sceptical that PA prices may sustain at such levels as the derivative dioctyl phthalate (DOP) segment is still performing poorly. In addition, growing concerns of debt woes in the US and Europe may further dampen market sentiment and exports of finished goods in the near term.
OX prices on a CFR basis in northeast and southeast Asia have risen by $30-50/tonne to settle at $1,380-1,410/tonne and $1,385-1,415/tonne respectively.
China
There were few deals heard to be concluded during the week.
Around 800 to 900 tonnes of northeast Asian material was heard to have changed hands at $1,320/tonne on an FOB basis. This transaction is estimated by market players to be equivalent to around $1,345/tonne CFR China Main Port (CMP) LC 90 days.
The supplier subsequently raised its offers to $1,340/tonne FOB northeast Asia towards the end of the week. However, no fixtures were concluded.
Other selling indications were at $1,330-1,360/tonne FOB northeast Asia. However, these offers failed to attract buyers. Buying indications remained at below $1,300/tonne CFR CMP.
In the domestic market, PA cargoes in the eastern provinces were traded at yuan (CNY) 10,200/tonne ex-warehouse (EXWH), rising by CNY100-150/tonne compared with the previous week.
In the southern and northern provinces, prices have firmed by CNY100-300/tonne to CNY10,400-10,500/tonne and CNY10,300/tonne EXWH respectively.
Southeast Asia
The buying sentiment in southeast Asia was equally bearish.
Several northeast Asian lots, with individual volumes of around 100-200 tonnes, were heard to have changed hands at $1,300-1,310/tonne CFR SE Asia for delivery in August.
Another 100 tonne cargo for August of northeast Asian-origin was booked by an end-user at $1,330/tonne CFR SE Asia.
Around 300 tonnes of PA was sold by another northeast Asian supplier at $1,320/tonne FOB northeast Asia, estimated by market players to be equivalent to $1,360/tonne CFR SE Asia LC 90 days.
Two parcels for August were heard to be sold at $1,380-1,395/tonne CFR SE Asia. However, this could not be confirmed.
Other offers were heard at 1,330-1,360/tonne FOB northeast Asia, estimated to be equivalent to around $1,360-1,400/tonne CFR SE Asia, which failed to attract buying interest. Buying indications were at $1,300/tonne CFR SE Asia.
($1 = CNY6.44)
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