The crude oil market closed the week of 7 September with prices down for the three straight session, weighed down by a strong US dollar, weakness in the equity markets, and Tropical Storm Gordon’s marginal impact on US Gulf Coast oil installations. US oil prices were also weighed down by disappointing inventory data which fell 4.3 million barrels, the lowest since February 2015, EIA data showed.
The purified terephthalic acid price run was halted this week in Asian markets as paraxylene prices retreated sharply and market participants awaited the result from the public hearing about tariffs amid the China-US trade war. In China, domestic PTA prices changed just slightly and few discussions were for spot goods to be delivered by the end of September. There was a large spread for nearby-month cargoes between sellers and buyers by the weekend. PTA plants average run rate stayed at 87%. Sinopec Yangzi Petrochemical restarted the No 3 PTA unit on 1 September while Yisheng Petrochemical planned to shut the No 4 PTA unit by the end of this week. Asian markers remained flat with CFR China at US$1,065-1,067 a ton and offers from Taiwan/Korea at US$1,075-1,077 a ton. In India, prices were at US$1,000 a ton CIF. In China, offers for bonded goods were maintained at US$1,160-1,180 a ton and major discussions at US$1.060-1,080 a ton.
In Europe, no major development was reported from PTA markets and prices generally rolled over. August PTA contract prices were stable at euro 763-797 a ton FD NWE.
In the US, August contract prices were assessed higher, tracking an increase in paraxylene and amid surging spot prices that tracked strong demand alongside tight supply in Asia. August PTA prices were assessed at US cents 53.06 per pound DEL, up US cents 2.85 from July.
Monoethylene glycol markets in Asia rose above the US$1,000 a ton mark early in the week but retreated significantly later as futures saw a limit down at the weekend. The sentiment had turned increasingly bullish ahead of the polyester peak period in September and October along with higher Chinese domestic prices. Stocking up activities were underway amid improved sentiment. The fall is also attributed to the 17% rise in East China to 549 kilo ton. More import cargo arrived amid a weaker off take rate. Spot prices inched up US$4 on the week to US$976-981 a ton CFR China and to US$965-967 a ton CFR Southeast Asia. In China, offers for nearby-month cargoes were heard at US$950-960 a ton, with counter offers at US$940 a ton, and discussions in the range of US$940-950 a ton.
In Europe, the August monoethylene glycol contract was fully confirmed down from July alongside full confirmation of the July contract. Contractual volume off take has been good and demand from the downstream PET sector remained high despite it being the end of the peak season. The August contract was fully confirmed at euro 999 a ton, down euro 11 compared with full confirmation of the July contract.
In the US, August contract prices were assessed at a rollover from July at US cents 41.5-47.5 per pound FOB USG.
Polyester staple fibre markets remained supported by higher feedstock costs despite a seasonal lull in demand. Prices in domestic markets inched up while export offers remained steady, while discussions were muted due to lack of buying appetite during the seasonal lull. Gains in feedstock purified terephthalic acid and monoethylene glycol values, along with higher crude oil prices, however, bolstered market sentiment. In Jiangsu and Zhejiang, offers for 1.4D direct-melt PSF inched up to 11.45-11.70 a kg (US$1.68-1.72 a kg) while the same in Fujian and Shandong were at US$1.69-1.72 a kg, up US cents 1-2 on the week. Export offers, however, remained stable at US$1.40-1.45 a kg FOB China.
In Pakistan, polyester fibre makers hiked offers on a firm PTA cost. However, trading sentiment was tepid and downstream yarn producers remained on the sidelines. 1.4D PSF producers’ offers were raised further by PakRs3 to PakRs.195-197 a kg (US$1.58-1.60 a kg, up US cents 2).
In India, the polyester fibre market was stable and discussions for 1.4D direct meltspun fibre generally remained unchanged. Offers rolled over in INR and down US cents 2 in US$ terms with 1.2D at INR95 a kg (US$1.31 a kg) and 1.4-2D at INR93.75 a kg or US$1.30 a kg.
Polyester spun yarn offers in China were kept firm as upstream raw material and feedstock markets were sluggish this week. Mainstream discussions for 32s and open-end yarn 10s were priced stably at the previous week’s level. However, better demand amid short supply pushed prices of finer 60s yarn further up. 32s polyester yarn offers were flat at 16.45 yuan a kg (US$2.41 a kg) and 45s at 17.60 a kg (US$2.58 a kg). 60s offers jumped to 17.30 yuan a kg (US$2.54 a kg, up US cents 9).
In Pakistan, a further hike in PSF prices supported polyester yarn prices to remain stable but firm this week. Falling cotton yarn prices were also considered to keep prices firm. In Karachi, 30s were at PakRs150 per pound (US$2.68 a kg) and 60s at PakRs170 per pound (US$3.04 a kg).
In India, with no change in PSF prices for this month yet, polyester yarn prices remained generally stable. 30s polyester knit yarn prices were steady at INR132 a kg (US$$1.84 a kg, down US cents 3 due to weak INR) in Ludhiana.
