Karachi May 9 2022: Lotchem price drop by 1.14 or 4.62% as PTA market is envisioned to trend lower as the peak season approaches its end and the downstream absorbs current high inventories, as per information shared by the company with investors.
The share price provided return of 75% from January to date.
However, upstream markets may eventually determine the price direction in addition to hopes of improving lockdown situation in China which may enable the downstream polyester industry to recover.
Moving forward, Crude Oil (WTI) prices are expected to trend lower on hopes of the easing conflict between Russia and Iran. Furthermore, the market eyes the ease of sanctions on Iranian and Venezuelan Oil exports that could add further barrels to the market. However, the continued post-pandemic demand growth and failure of OPEC+ to deliver promised barrels may restrict any significant dip in prices.
Paraxylene (PX) prices are expected to follow the Crude Oil market and trend downwards in the next quarter. Moreover, the expected capacity addition of a million metric tonne PX plant in China may further add pressure to PX prices. Nevertheless, continued low operating rates amid weak margins in the region may prevent an oversupply in the market.
The domestic Polyester market is expected to continue showing strength due to the existing high demand from the textile sector as well as improved consumption in the PET sector owing to the Holy month of Ramadan. However, the uncertain political situation of the country and the resulting dwindling exchange rate poses a threat to domestic industrial operations.
