Phthalic anhydride producers in South Korea, who meet most of the demand for the product in Asian spot markets, are holding back their offers this week, citing very low bids.
"Though our sell idea for PA this week is $1,400/mt FOB Korea, bids are coming at much lower levels. Feedstock orthoxylene continues to be priced high and it is not possible for us to sell at a low price," a source at South Korean producer Aekyung Petrochemicals said.
At the close of markets last week, Platts assessed PA price at $1,315/mt CFR China and OX at $1,403/mt CFR China. For the past three months, PA has been sold at considerably lower prices on a CFR China basis than the FOB Korea offers by South Korean producers.
"South Korean producers lower their prices for Chinese buyers for they buy in large volumes," a source said.
"This week we reduced our offer from $1,400/mt FOB Korea to $1,360-1,380/mt FOB, but still there are no credible bids. We will therefore wait and watch the market trend rather than sell," a company source at another South Korean producer Hanwha Chemical said.
OCI, the third PA producer in China, said it sold 1,000 mt of PA at $1,360/mt FOB Korea but said both demand and bids were low.
In domestic China markets PA prices dropped Yuan 100 ($15.54) this week to Yuan 10,200/mt a company source at producer Shandong Hongxin said. "There is no demand," the source said.
None of the PA producers in Asia were however heard slashing their run rates this week or planning a shutdown because of low prices.
