Polyester fibres and yarns were dearer on cost support
During the second week of May, all major manmade fibre prices rose or remained firm on cost support and are likely derive the same for some more time. However, market fundamentals had a role to play but only negligible, but were mostly driven by political wars between US and China and now Iran this week. Recent hike in crude oil price have been the starting point for petrochemicals to become dearer while maintenance shutdown season kept supplies in a slighter deficit mode.
In case of polyester, feedstock paraxylene prices crossed US$1,000 a ton after that level was last seen in May 2015. And this surge followed crude oil prices which hit a multi-year highs in the week as markets reacted to renewed US sanctions against Iran amid an already tight market. US proposed to impose new sanctions on Iran, which produces around 4% of global supplies, after abandoning an agreement reached in late 2015.
Purified terephthalic acid, derivative of paraxylene, markets were on sound fundamentals and prices were easy to climb but difficult to surge in line with paraxylene. Some major units that are scheduled for maintenance shut down in coming future, provided room for margin recovery in PTA processing. In China, domestic PTA market was strong and major suppliers continued to sell goods at flat spot offers. Asian PTA markers inched up US$5-15 a ton week on week.
Mono ethylene glycol prices were under pressure in Asian markets amid expectations of bloating China’s inventory due to influx of imported cargoes. However, market fluctuated in weakness on weekend after a dramatic fall on previous day on the back of healthy transaction and growing selling interest. MEG spot prices plunged US$49 a ton on the week. In China, offers for nearby-month cargoes were offered at US$950 a ton. June cargoes were negotiated at US$945 a ton. PTA
Polyester chip markets were also well supported by healthy supply and demand fundamentals, and prices were in a narrow fluctuation in tandem with feedstock movement. As PTA firm up early in the week, chip based spinning mills made more enquiries, leading to brisk trading. Semi dull chip offers were raised US$10 a ton while super bright chip offers were flat.
Polyester staple fibre (PSF) prices inched up in China pushed by strong cost. Offers for China-origin rose in the week amid higher feedstock costs and lower inventory levels in China. Domestic demand in China was on an uptick recently and as a result, producers hiked offers for the export markets. Offers for 1.4D direct-melt PSF were raised US cents 2 a kg in Fujian and Shandong to US$1.39-1.44 a kg. In Pakistan, PSF prices remained unchanged after previous week hike by producers on rising raw material cost on the international market. 1.4D PSF prices were steady at PakRs.167-169 a kg (US$1.44-1.46 a kg). In India, producers prices remained steady for the after they were revised down in early April. Meanwhile, spinning mills made need based procurement, leading to decent trading. 1.2D rolled over at US$1.41 a kg.
Polyester spun yarn prices inched up in China this week on rising cost support and improving demand in the domestic market. Transaction for some finer count specs was brisk supporting prices to rise. 32s polyester yarn offers were up US cent 1 to US$2.19 a kg while 50s were lifted US cents to US$2.42 a kg.
In Pakistan, polyester yarn prices did not move in the second week of May after they followed hike in PSF prices in the previous week. However, demand was still modest but showed no signs of significant improvement in the short run. In Karachi, 20s were at US$2.42 a kg and 60s at US$3.03 a kg. In India, prices remained steady in Ludhiana market as spinners makers maintain stable operation. 30s polyester knit yarn prices were at US$$1.96 a kg in Ludhiana market.
Source: Global Markets Weekly Review
