Crude oil prices rose more than 1% this week, with Brent at its highest in seven weeks and US crude touching a three-week peak, supported by a drawdown in crude and gasoline stocks in the US and reduced Iranian crude shipments as US sanctions deter buyers. Oil prices were buoyed by indications that Iranian crude exports were falling faster than previously anticipated.
PTA prices hit a four-year high, opening the week in Asia on the back of tight supply in key China market. Current prices levels were last seen in August 2014. In China, purified terephthalic acid plants posted an average run rate of 84% last week. Jialong Petrochemicals PTA plant was still down. In China, as paraxylene values surged on the week, offers for PTA bonded goods also surged but there was a large spread on the ideas for nearby-month cargoes between buyers and sellers. Spot markers gained US$70 on the week with CFR China at US$1,065-1,067 a ton and offer from Taiwan/Korea rose to US$1,075-1,772 a ton. In India, prices were at US$1,000 a ton CIF.
In Europe, purified terephthalic acid supplies were still limited and feedstock prices elevated. The August PTA contract price was stable at Euro 763-797 a ton FD NWE.
In the US, PTA markets were quiet as demand remained subdued. Overall, it is apparent that PTA prices are unlikely to decline significantly in the short-term. However, the upward momentum may drop in coming weeks. June contracts rolled over at US cents 50.21 per pound (US$1,107 a ton).
Paraxylene prices in Asia continued to surge for the fourth week in a row, gaining almost more than 21% during the period as downstream purified terephthalic acid and polyester markets have all risen of late amid supply tightness and healthy margins. Meanwhile, isomer-xylene prices softened due to an influx of US cargoes, which may ease the cost for paraxylene producers. The September paraxylene contract price was settled up from the previous month; between SKGC and Yisheng Petro and S-Oil and Shenghong Petro. Spot prices soared US$125 on the week, with CFR Taiwan/China at US$1,370.50-1,371.50 a ton and FOB Korea to US$1,351.17-1,352.17 a ton. The September contract price was settled at US$1,340 a ton CFR Asia, up US$280 from the previous month.
In Europe paraxylene, supply was tight, with limited spot activity seen this week. With supply not expected to re-balance in near future, spot prices jumped also taking cue from Asia. Prices jumped US$103 to US$1,272 a ton FOB Rotterdam. In the US, spot export prices of paraxylene increased US$100 to US$1,180-1,220 a ton FOB USG.
In the US, spot export prices continued to increase on rallying Asian values, while domestic demand was muted amid ongoing production disruptions in the North American PTA market, which also supported US-to-Asia arbitrage. Multiple shipments heard during the week. Spot US Gulf Coast prices also jumped significantly. Spot US Gulf Coast prices were assessed at US$1,304 a ton, the highest since August 2014. Since July this year, spot price has risen 38%, tracking Asian markets higher.
MEG prices fluctuated in a narrow range earlier in the week in Asian markets, and picked up rapidly on the weekend as futures market saw an up-limit, pulling up prices. Meanwhile, Sinopec hiked its list prices as spot discussions jumped and inventories fell 4% to 469 kilo ton. The drop was due to decrease in import cargo arrivals. Spot prices gained US$38 with US$25 jump on weekend to US$972-977 a ton CFR China and to US$960-962 a ton CFR South East Asia.
In Europe, mono ethylene glycol bulk spot prices rolled over on stability at low supply. Bulk offers were in the range of Euro 880-890 a ton CIF NWE.
In the US, August mono ethylene glycol contract prices were assessed at a rollover from July amid balanced supply and demand. Domestic supply improved overall from the previous month after the conclusion of turnarounds. Exports to Asia were soft as US prices were higher than Asia's, but some material was heard to have shipped to Europe due to firmer offers in the region. August contract prices were assessed at a rollover from July at US cents 41.5-47.5 per pound FOB USG.
Polyester staple fibre prices continued to climb following hikes in feedstock purified terephthalic acid and mono ethylene glycol prices. However, trade discussions were curtailed as buyers continued to resist increases without an uptick in downstream demand. In China, PSF offers and discussions for 1.4D direct-melt-spun PSF in Jiangsu and Zhejiang were raised early in the week in Shandong and Hebei. In Fujian, PSF market sentiment stabilised after the hike but downstream buyers adopted cautious attitude. In Jiangsu and Zhejiang, offers for 1.4D direct-melt PSF were hiked to US$1.67-1.70 a kg while the same in Fujian and Shandong were at US$1.68-1.71 a kg, up US cents 5-6 on the week. Export offers also climbed to US$1.40-1.45 a kg FOB China, against US$140-1.42 a kg a week ago.
In Pakistan, producers raised offers citing significant jumps in raw material prices while downstream followed up. The All Pakistan Textile Mills Association has urged the government to bring down import duty on polyester staple fibres to 0% to revive the local industry. 1.4D PSF producers’ offers were raised PakRs7 to PakRs.192-194 a kg (US$1.56-1.58 a kg, up US cents 5).
In India, PSF offers rolled over in INR and down US cent 1 in US$ terms with 1.2D at INR95 a kg (US$1.33 a kg) and 1.4-2D at INR93.75 a kg or US$1.32 a kg.
Polyester yarn prices moved up in line with the rise in polyester fibre prices in China, while they were stable in India and Pakistan. In China, polyester yarn markets were driven by rising cost of PTA and MEG, while the same has affected polyester fibre market in Pakistan and producers lifted their offers. The rise is yet to reflect in polyester yarn market, but may be sooner in next week. Weak demand in India was hurting polyester yarn markets, although export were charged up in July.
32s polyester yarn offers in China were raised to 16.45 yuan a kg (US$2.41 a kg) and 45s to 17.60 a kg (US$2.58 a kg), both up US cents 4-5. 60s offers jumped to 16.70 Yuan a kg (US$2.45 a kg, up US cents 6). Offers for yarn made of recycled PSF were also hiked with 21s to 14.20 Yuan a kg (US$2.08 a kg, up US cents 4) while 32/2 were steady at 16 yuan a kg (US$2.34 a kg).
In Pakistan, polyester yarns prices were steady in Karachi with 30s at PakRs150 per pound (US$2.69 a kg) and 60s to PakRs170 per pound (US$3.05 a kg). In India, 30s polyester knit yarn prices remained unchanged at INR132 a kg (US$$1.86 a kg) in Ludhiana.
