On account of better cotton arrival, lint prices witnessed its second round of easing that was further amplified by the recent plunge in commodity prices, said analysts at Topline Securities Wednesday. “Thus, cotton prices after seeking support on levels above US$1.0/lb fell back to $0.94/lb,” Furqan Punjani said. This, the analyst said, was also replicated in downstream chain with PTA prices falling to $1185/tonne, a 2-month low. However, things were different for its primary raw material Paraxylene (PX) where due to supply concerns especially in Asia continued to follow its bullish momentum to currently stand at $1625/tonne, the analyst added. Resultantly PTA’s primary margins have recently eased to $100-120/tonne in last few days, though on temporary basis awaiting a pick up in seasonal demand for polyester to recover. Punjani said soon after better cotton arrival numbers from India, China and flood-affected Pakistan, the lint prices had seen another round of easing on expectations that lint supply would remain firm in the coming days. “This decline was further augmented by the recent sell-off in global commodity markets with investors moving to safe asset classes,” he added. Thus, he said, lint prices were seen easing to $0.94/lb from its earlier trading range of $0.1-0.105/lb. PTA prices being linked to its raw form replicated the phenomenon to come down to a 2-month low of $1185/tonne compared to an average of $1,235/tonne seen in outgoing 3Q2011. On the other hand PX prices were seen consistently rising on the back of tight supply amid aromatics turnaround in Asia especially after concerns regarding 0.7 million tonnes PX plant closure in China. Average PX prices were assessed at $1600/tonne in the last trading week. This has shrunk PTA primary margins to $100/tonne.
