Polyester input: MEG
Mono ethylene glycol prices faced further downward pressure amid expectations of output cuts by downstream polyester makers in China. Spot prices lost around 3% this week and more than 11% since end August. Cutbacks in polyester production may be due to upcoming week-long National Day in early October and producers facing mounting cost pressure following spikes in raw material prices in recent weeks. PFY accounts for more than 50% of PTA-MEG usage in China. Rising inventories also weighed on prices as they rose 1% on the week to 483 kilo ton due to weak offtake rate.
Spot prices declined US$25 on the week to US$860-865 a ton CFR China and to US$848-850 a ton CFR South East Asia. In China, counter offers for nearby-month cargoes were at US$850-855 a ton, and discussions at US$855-860 a ton. Sinopec cut its settlement prices to 7,880 yuan a ton (US$1,150 a ton, down US$30) from August.
In Europe, mono ethylene glycol import supply improved for October deliveries, which asserted downward pressure on bulk spot prices. Demand from the antifreeze sector was good and better than fibre grade in some cases. Bulk spot prices were assessed Euro 25 down at both ends, bringing them in the range of Euro 860-870 a ton CIF NWE. Truck spot prices also declined Euro 10 at the low end and stable at the high end, with prices ranging Euro 900-915 a ton FCA NWE. In US, MEG contracts were unchanged at US cents 41.5-47.5 per pound FOB.
Polyester input: PTA
Purified terephthalic acid prices were under pressure due to weak downstream markets, despite tight supply. Squeezed margins and slower sales in the downstream polyester markets weighed on PTA prices as average sales-to-output ratio in the polyester sectors stood at 40%, compared with 40-50% in the previous week. Several polyester makers were mulling further cuts in operating rates to avoid inventory build-up as sales remain slow. PTA markers declined US$50 week-on-week, with CFR China at US$1,025-1,027 a ton and offers from Taiwan/Korea falling to US$1,035-1,037 a ton. In China, offers for bonded goods were maintained at US$1,160-1,180 a ton, while offers for November deliveries were heard at US$1,290 a ton.
In Europe, PTA spot supply remained constrained and prices were high, despite the market moving into a typically low season for downstream PET. The region has two PTA maintenance shutdowns slated for September/October. Notwithstanding the drop in prices in Asia, the European market was counting on a significant hike in paraxylene and PTA September contract prices. August PTA contract price were stable at Euro 763-797 a ton FD NWE.
In the US, Alpek's PTA plant in Mexico remained shut following fire in July while Indorama will bring down its PTA plant in Montreal, Canada, for maintenance between 12 and 28 October. With paraxylene price increases prompting talk of increases in September PTA contract of as much as US cents 6.50-7 per pound.
Nylon input: Caprolactam
Caprolactam prices firmed up early in the week in Asia and went stable later amid thin demand. In China, offers for liquid and flake materials gained sharply as demand continued to support the prices, as the market headed towards its peak season. Japan's Sumitomo Chemical settled its September contract price higher than in August in expectation that demand will support the price. Asian markers surged US$30-40 this week with SE and FE Asia at US$2,150-2,200 a ton. In China, spot prices for liquid goods were jumped to 18,000-18,300 yuan a ton (US$2,630-2,670 a ton, up US$40). Japan's Sumitomo Chemical settled its September caprolactam contract price at US$2,180 a ton CFR NE Asia, up US$15 from August.
In Europe, caprolactam contract discussions for September were mostly concluded at rollovers but a few final talks continued. Some slight reductions in prices were heard due to moves in benzene market for September. Supply was said to be ample and buyers had already factored in the planned turnarounds. August contracts were settled at varying decreases, with most falls not in proportion with benzene drop, which was originally discussed earlier in the month. September contracts settled at Euro2,272-2,433 a ton FD NWE rolling over from August.
Acrylic input: Acrylonitrile
Acrylonitrile prices in Asian markets fell this week snapping the six-month gains, but further falls will be limited by upcoming plant turnarounds which will tighten supply again. Some Asian suppliers had to reduce offers to attract buying interest amid slowing demand from downstream acrylonitrile-butadiene-styrene and acrylic fibre sectors. In China, factories producing products such as home appliances and apparel, which use ABS and ASF feedstock, were struggling to bag overseas orders amid an escalating trade war with the US. Markers fell US$20-50 this week with Far East CFR back to US$2,229-2,231 a ton, while CFR China fell to US$2,150-2,180 a ton. In China, self-lifting values at Lianyungang port remained flat at US$2,750-2,780 a ton.
In Europe, September contract prices settled at a double-digit increase on the back of higher feedstock costs and limited availability. Meanwhile, spot prices remained unchanged. Spot prices rolled over at US$2,048-2,052 a ton CIF Mediterranean. September contract prices were settled at Euro34 hike at Euro 2,133-2,201 a ton FD NWE. Deals confirmed by producers and buyers stood at a Euro 33-35 a ton month-on-month increase.
In the US, acrylonitrile spot prices were unchanged at US$2,110-2,130 a ton FOB USG, while domestic contracts were at US cents 81.07-85.07 per pound (US$1,787-1,875 a ton) DEL USG. The market gauged ongoing and upcoming turnarounds in the global market.
