KARACHI: During Dec’18 (based on two weeks data), PVC margins went up by 19.7% MoM (USD 486/ton). However, PTA and PSF margins registered a decline of 12.9% MoM (USD 155/ton) and 13.2% MoM (USD 243/ton), respectively.
The changes in margins will have negative implications for ICI Pakistan Limited (ICI) and Lotte Chemical Pakistan Limited (LOTCHEM).
PSF margins decreased by 13.2% MoM to an average of USD 243/ton during Dec’18 (based on two weeks data).
“The downturn in margins was witnessed due to decline in prices of Polyester Staple Prices (PSF),” Rao Aamir at Arif Habib Limited said.
However, Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) prices also declined by 5.3% MoM (USD 855/ton) and 3.1% MoM (USD 710/ton), respectively. During CY18 to date, PSF margins remained stable on YoY basis (+0.6% YoY to an average of USD 255/ton).
PVC margins went up by 19.7% MoM to an average of USD 486/ton during Dec’18 (based on two weeks data). Rise in margins is backed by decline in Ethylene prices, down by 14.9% MoM to an average of USD 760/ton.
“The price decline is supported by sluggish demand due to product availability in the region,” Ali said.
In addition to this LG Chemical (Production capacity of Ethylene: 1mn ton/year) also resumed production during the previous month which also stressed prices of ethylene.
Against this, PVC prices went up by 1.5% MoM to USD 870/ton. During CY18, PVC margins decreased by 4.7% YoY to an average of USD 339/ton.
PTA margins went down by 12.9% MoM to an average of USD 155/ton in Dec’18 (based on two weeks data). Decline in margins is due to 5.3% MoM decline in PTA prices. However PX prices also declined by 3.4% MoM. During CY18, margins increased by 54.3% YoY to an average of USD 164/ton.