The Asian purified terephthalic acid market plunged through the $1,000/mt support level into the three digits Monday for the first time since October 11, 2010, as already-weak market sentiment deteriorated rapidly following a sharp plunge in Western crude oil benchmarks.
The CFR China PTA price benchmark sank $40/mt or 4% Monday from last Friday to be pegged at $961/mt in early afternoon trade.
The Asian PTA market breached a psychologically-important $1,000/mt CFR China level quickly Monday morning, hit by heavy selling pressure following a plunge in Western crude oil futures. NYMEX July crude futures settled $3.30/barrel lower Friday at $83.23/b, while ICE July Brent closed down $3.44/b over the same period at $98.43/b.
Offer levels for spot PTA cargoes were reported at $980/mt CFR China Monday but no bids were reported, as buyers were expecting further price falls in the coming days.
PTA market sentiment was dampened further by China's Zhengzhou Commodity Exchange suspending PTA futures trading after it hit the 4% daily limit. Trading in the most actively-traded September futures were suspended at 9:44 am local time (0144 GMT), after the marker fell Yuan 386/mt from Friday to Yuan 7,300/mt. Market sources said trading would resume Tuesday.
The sharp plunge in the Asian PTA market would likely trigger operating rate cuts, market sources said. Asian PTA producers have been suffering from negative margins since December 1, 2011.
