The production and demand for Purified Terephthalic Acid (PTA) has witnessed rapid expansion in China in the last few years. While the estimated production of PTA in 2008 stood at 10 million tons, imports amounted to 6 million tons in the same year.
The rapid increase in domestic production has reduced the reliance on imports of the raw material. New capacities are also expected to be added in the current year, which will increase supply from domestic sources and reduce imports even more.
The international crude oil prices had fallen below US $50 mark, but the current supply position of PTA is still tight, as plants producing the petrochemical are still not operating at full capacities, due to cutbacks in production implemented a few months ago.
Current prices of PTA are ruling at 9 year lows, and there does not seem any possibility of prices falling further in view of strong crude oil prices. A rebound also seems unlikely, though favourable conditions may help an increase in PTA prices.
Fibre2fashion News Desk - China
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