PTA Market Daily (Sep 1, 2010)

PTA Spot

　　·Traded price of offshore spot goods: $880/mt (Korea origin)

　　·Traded price of offshore spot goods: $895-897/mt (Taiwan origin)

　　·Traded price of spot goods in RMB market: 7300yuan/mt by cash, on deck

　　·PTA offer-take index: 1.5

Review

PTA spot market fluctuated on Wednesday. The market was in a looking-on sentiment this morning as PTA futures was volatile recently. Offers rose slightly to 7,350-7,400yuan/mt. Traders were not active in purchasing as there was limited room for speculation. Some plants have bought in earlier this week, thus demand was not high and transactions were plain. Offers slipped a little to around 7,350yuan/mt in the afternoon. Mainstream done level was 7,300-7,350yuan/mt but several deals were done lower in Ningbo at 7,300yuan/mt.

In the morning, Taiwan-origin cargoes were offered at $905-910/mt and done at $900/mt. Sellers were unwilling to sell below this level. Korea-origin cargoes were talked or done at $880-885/mt. The market weakened in the afternoon. Korea-origin cargoes were offered at $885/mt and traded at $878-880/mt. Offers for Taiwan-origin cargoes were scarce. Talked level fell to $895-900/mt.

Idemitsu Kosan and JX Nippon Oil & Energy concluded the September Asia Contract Price at $950/mt CFR, up $60 or 6.3% higher than August.

Downstream

PFY sales ratio in Jiangsu and Zhejiang mostly held at 60-80% level, with some lower at 40-50%. The ration reached or exceeded 100% in a few plants. Most plants purchased on a need-to basis.

Outlook

PX was settled at $950/mt, up $60/mt from Aug. Thus production cost will increase in Sep. PTA supply in contract terms decreases due to the turnarounds of some major producers. Besides, most spot materials are in the hand of major traders, they are unlikely to sell at low prices unless macro economy deteriorates.

($1=CNY6.81)