Petroleum chemical margins slide: Margins of the overall petroleum chemicals have witnessed a decline during Mar16 where margins of PSF stood at USD 270/MT, PTA at USD 107/MT and PVC at USD 211/MT, down by 10%, 9% and 24% MoM, respectively. Margins for petroleum derivative chemicals in general were on the lower side mainly due to the sharp uptick in int’l oil prices to USD 39/bbl, increasing by 17% MoM.
Supply glut contain PSF margins: PSF margins stood at USD 270/MT during Mar16, down by 10% MoM (- 21%YoY), because of higher input costs as PTA and MEG prices witnessed an incline during the month while PSF prices lagged behind. Despite the antidumping duty imposed on China’s PSF, major supply glut in the PSF market has constrained PSF prices from freely adjusting to increase in costs. ICI Pakistan’s PSF division has been facing stiff competition from China and the recent decrease in PSF margins may further worsen ICI’s position.
PTA prices lag increase in PX prices: PTA margins on the other hand also witnessed a fall during Mar16, standing at USD 107/MT falling by 9% MoM (-3% YoY). Although the price of PTA has increased to USD 612/MT during Mar16, up by 4.6% MoM on back of lift in buying interest, but the price has not yet fully adjusted to the rise in PX prices.
By: Global Securities Private Limited