KARACHI: Pure terephthalic acid (PTA) and paraxylene (PX) prices are standing at two-year highs, according to Topline Securities.
Increase in PTA prices is due to higher cotton prices which prompted consumers to buy more Polyester Staple Fibre (PSF) which is manufactured from PTA. Thus, with higher demand, PTA prices are expected to remain on the higher side which bodes well for international and local PTA manufacturers, said Topline Securities analyst Furqan Punjani.
However, contrary to this, any sharp decline in oil prices will lower PX prices allowing the sector to reap the benefit of higher PTA prices, added Punjani.
PX prices are hovering at the two-year high on the back of surging oil prices. PX is the primary raw material for PTA production.
Lotte Pakistan 3Q2010 EPS likely at Rs0.50
Lotte Pakistan is yet again in the limelight due to better primary margins in the third quarter (3Q2010) ended September, thanks to stable international PTA prices and decline in PX rates, said Punjani.
Hence, Lotte Pakistan PTA is likely to post earnings per share (EPS) of Rs0.5 in the quarter, 40 per cent lower on a quarterly basis, however, this will translate into cumulative EPS of Rs1.91 in the first nine months of 2010, 42 per cent higher compared to the same period last year, added Punjani.
International primary margins improved slightly to $250 per ton in the third quarter from $240 per ton in the same period last quarter.
Published in The Express Tribune, October 15th, 2010.
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