Polyester manufacturing gets costlier as raw material prices rise
Polyester manufacturing got costlier in the week ending 13 April as PTA and MEG, the key raw materials prices surged. They are used in manufacture of chip, fibre and filaments.
Mono ethylene glycol prices in Asia surged US$43 a ton week on week, tracking the sharp price increase in China’s domestic market, on the back of tight supply and restocking by downstream polyester players. Some buyers were urgently scouting for cargoes to fulfill their April requirements amid scarce offers as re-sellers opted to hold on cargoes seeing rapid spike in spot prices. MEGlobal announced its May MEG Asian contract price US$50 higher from April nomination, reflecting the short-term supply/demand situation in the market and recent price uptrend of spot prices ahead of seasonal demand season.
Purified terephthalic acid prices fluctuated strongly during the week as crude oil futures rushed higher under the influence from geopolitical situation. Asian PTA markers gained US$15 a ton on the week with CFR China. Buoyed by rising crude oi prices, PTA market got a bit stronger and under the pressure from feedstock costs, prices of polyester products also followed up as well.
Polyester chip prices also firmed up as cost rose, prompting chip makers to hike offers. Semi dull chip discussions hovered at high level while super bright chip markets mirrored the trend. CDP chip markets were under narrow fluctuation. Asian benchmark, SD continuous spinning fibre grade chip offers of Taiwan/Korea origin were raised US$25 a ton FOB.
Polyester staple fibre prices were firm in China local markets while discussions for China-origin PSF 1.4D cargoes were largely unchanged in the week amid opposing market factors. Demand was slightly down as inventory levels rose in domestic market, but producers kept offers at similar levels after the recent rebound in MEG prices. In Jiangsu and Zhejiang, offers for 1.4D direct-melt PSF were lifted US cent 1 a kg.
Polyester filament yarn prices were hiked across specs in China while they remained unchanged in India and Pakistan during the week. In Jiangsu, PFY prices were largely stable to up, with sporadic higher. Trading atmosphere was mute, as downstream mills mainly digested their stocks with sidelined stance. POY offers for 75/72 rose US cent 6 a kg in Shengze while FDY offers were hiked US cents 6 a kg for 50/24 and 150/96.
Polyester yarn prices were stable across China, India and Pakistan although PSF cost firmed up in recent weeks. In Pakistan, with producers lifting PSF offers in April, polyester yarn market in Karachi was well supported while weak PakRe made imports costlier, which in turn was supportive to local spinners. In India, polyester yarn prices were unmoved despite PSF offers were lowered for April.
Source: Global Markets Weekly Review
