European paraxylene producers are eying the US market as an outlet to offload ample supplies as purified terephthalic acid and polyethylene terephthalate producers suffer weak demand, sources said.
One trader said market participants in the fiber chain "have adequate amounts" of acetic acid and paraxylene -- the key feedstocks for PTA, as the Asian market correction continues.
In turn, the US market is now the highest-pricing region at $1,435/mt FOB USGC, Platts data showed Thursday.
European sources said that, given the declines seen in Asia this week, Europe should be pricing close to the $1,350/mt FOB ARA level, making the US an attractive destination for European material.
The European market was assessed at $1,368/mt FOB ARA Thursday, down $25/mt from Wednesday and $32/mt down compared with last week, when it was assessed at $1,400/mt.
"We are sending our latest shipment to US as [there is] not much buy interest in Europe," one trader said this week.
"I would say that sellers would sell at those levels [mid $1,300s], unless they [want to] stockpile product," the trader said. "As with crude falling, PX seems to be following the downtrend. We really need PTA to pick up for PX."
The bearish sentiment was backed up further down the chain and there was no expectation that sentiment would improve for June, a key seasonal demand period for PET.
"I'm not surprised. Downstream demand was very bad in May and everyone is holding back. Volumes have not picked up, PTA producers have told me," one PET producer said.
Sources also said the market has been weighed by additional PX supplies arriving from Russia, which made re-supply into the US attractive for sellers.
In Asia meanwhile, spot PX prices tumbled $21/mt on the day Friday to be assessed at $1,391.5/mt FOB Korea and $1,416.5/mt CFR Taiwan/China -- the lowest since December 7.
On a week-on-week basis, the markers fell $39.50/mt.
The Asian PX market was under heavy selling pressure Friday as it lost support from traders short covering for the June laycan.
Market sources said traders had mostly covered their short positions by Friday -- which had been supporting the market, despite global economic turmoil -- resulting in the price collapsing Friday.
PTA and mono ethylene glycol are used to make PET fiber, which is used in the manufacture of clear plastic bottles.
