KARACHI: During February 2019, PVC and PTA margins went down by 19.1% and 13.4% to USD 381/ton and USD 115/ton, respectively. However, PSF margins registered an increase of 4.3% to USD 351/ton.
The change in margins will have negative implications for Engro Polymer and Chemicals Limited (EPCL) and Lotte Chemical Pakistan Limited (LOTCHEM).[the_ad id=”32940″]PSF margins increased by 4.3% to an average of USD 351/ton during February 2019. The uptick in margins was witnessed due to decline in prices of Mone Ethylene Glycol (MEG). However, prices of Purified Terephthalic Acid (PTA) increased by 2.2% to USD 865/ton. The impact of higher PTA prices was diluted by 2.6% rise in Polyester Staple Fiber (PSF) prices. During 2MCY19, PSF margins have gone up by 41.2% to an average of USD 343/ton.
PVC margins went down by 19.1% to an average of USD 381/ton during February 2019. Downturn in margins was backed by 24.4% rise in Ethylene prices to an average of USD 1,028/ton. Strong regional demand and tight product availability pushed up the prices during the month under consideration. However, PVC prices also increased by 1.3% to an average to USD 900/ton. During 2MCY19, PVC margins jumped up by 38.4% to an average of USD 427/ton.
PTA margins went down by 13.4% to an average of USD 115/ton in February. Decline in margins was due to 6.4% rise in Paraxylene (PX) prices. However PTA prices also increased by 3.2%. During 2MCY19, margins have come down by 4.7% YoY to an average of USD 124/ton.
“PVC and PTA margins are currently hovering around USD 393/ton and USD 137/ton, respectively. However our long term assumptions are set at USD 325/ton and USD 140/ton, respectively,” Rao Amir Ali at Arif Habib Limited said.