Asian Purified Terephthalic Acid Margin on a Spot Basis Hit a 10-Month High Tuesday

The Asian purified terephthalic acid margin on a spot basis hit a 10-month high Tuesday amid the bearish market for feedstock paraxylene due to active selling by Chinese PTA producers, Platts data showed.

Based on Platts PTA and PX assessments Tuesday, the Asian PTA margin on a spot basis was calculated at minus $31.50/mt, the highest level since July 6.

The Asian PTA market rebounded earlier this month, lifted by strong demand from downstream polyester makers in China. Polyester demand climbed, given demand for summer clothes.

The CFR China PTA price was assessed at $1,059/mt Tuesday, gaining $36/mt from May 1. The CFR Taiwan/China PX price benchmark was assessed at $1,425/mt Tuesday, inching up $6.50/mt during the same period.

Despite strong downstream polyester prices, the Asian PX market has been under pressure this month, hit by active selling by Chinese PTA producers. Key PTA producers -- such as Yisheng Petrochemical, Shaoxing Yuandong, and Hengli -- have been active PX sellers in a bid to reduce their high inventories. As a result, the Asian PX market was capped at around $1,430/mt CFR, an offer level by the Chinese PTA producers.

However, market participants were skeptical if the PTA margin would continue to increase.

"Typically, summer clothes season ends around the end of May," a Japanese PTA trader said. "Polyester demand would likely slow down from June, which would also push down PTA demand."

Early Wednesday, the Asian PTA and PX market was hovering around $1,059/mt CFR China and $1,425/mt CFR Taiwan/China, unchanged from Tuesday's assessments.