Purified tephthalic acid (PTA) has become cheaper by 10 per cent during the past week following temporary suspension of imports from China due to the coronavirus outbreak. Trading now at $600-$620 a tonne, PTA prices slumped from around $660-$700 a fortnight ago. Withdrawal of anti-dumping duty on this synthetic textile raw material has made it cheaper in India.

The 2.5 per cent anti-dumping duty on PTA was abolished by the government in the budget announced on February 1. Indian producers have sufficient stock to meet the import component of supply to synthetic yarn makers and offset the impact of temporary import suspension, according to a report in a top business daily.

S&P Global Platts reported in the first week of this month that prices had tumbled to almost a four-year low in the downstream PTA market. There was also uncertainty over how much the prices will fall further as there was a lack of drivers to support prices, it said.

PTA prices are determined by the movement in crude oil prices, which have also slumped by 10-12 per cent in the past one week. Since PTA is linked to crude oil, its prices are quoted in dollars even by domestic manufacturers.

The abolition of duty on PTA is said to boost the profitability of synthetic yarn manufacturers. Demand will rise due to low raw material cost and benefits will be passed on to consumers.

With an installed capacity of around 5 million tonnes, Indian producers including large crude oil refiners utilizes around 80 per cent PTA capacity. China has a production capacity of 45 million tonnes of which 35 million tonnes is consumes locally. The remaining is exported.

Fibre2Fashion News Desk (DS)

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