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Falling crude triggers cost reduction in raw materials for making polyester

YarnsandFibers News Bureau 2014-09-08 12:46:00 – Mumbai

In the week ended 5 September, crude oil prices climbed more than US$2 early in the week as the markets bounced off several month lows hit in the previous week. Also prospects for peace in CIS and a strong US data raised demand expectations. Weaker US$ and expectations of a decline in US crude stocks also supported prices. However, the oil complex settled lower on the week after a ceasefire agreement in Ukraine helped minimize risk premium, while concerns remain over the impact of Russian sanctions on European demand. NYMEX October crude closed at US$93.29 per barrel, down US$2.67 on the week while on the ICE October Brent crude settled at US$100.82 per barrel also down from last week.

Asian naphtha market continued to portray a bearish outlook opening the week and the weakness continued to characterize the market.

Polyester feedstock and intermediate prices reacted to the fall in energy complex. While feedstock ethylene prices were assessed unchanged on the in Northeast Asia, paraxylene prices were down as demand weakened despite slight improvement at week end. Asian ethylene marker, the CFR Northeast Asia rolled over at US$1,529-1,531 a ton. Paraxylene prices were down US$23 on the week at US$1,254.50-1,255.50 a ton FOB Korea and US$1,277.50-1,278.50 a ton CFR Taiwan/China.

Fibre intermediates, mono ethylene glycol and purified terephthalic acid continued to trend down as buyers were reluctant to deal opining that prices were at unviable levels, after the recent spurt. Bearish outlook and weakening demand also pulled down their values over the week. Asian MEG prices fell US$13 week on week, assessed at US$968-973 a ton CFR China and US$970-972 a ton CFR Southeast Asia. PTA prices fell US$18 in similar comparison to US$957-959 a ton CFR China and US$972 a ton FOB Korea/Taiwan. Polyester chips market saw insipid trading but producers held offers stable opening the week. As raw material started weakening promoted by paraxylene, semi dull chip producers lowered offers gradually. In China, offers for semi dull chips fell US$10 to US$1,465-1,480 a ton while offers for super bright chip was at US$1,475-1,490 a ton.

Polyester filament yarn markets were broadly stable in Asia and producers pegged offers mostly stable. POY 75/72 was traded at US$1.64-1.66 a kg in Shengze market while DTY 75/72 was in the range of US$2.07-2.08 a kg. Polyester staple fibre prices fell further in China and India, while prices were seen rising in Pakistan. In China, 1.4D direct-melt-spun PSF was mainly traded at US$1.54-1.55 a kg, down US cents 1-2 from last week in Jiangsu and Zhejiang. Indian PSF prices were cut INR2.75 to INR101.25 per kg, or US$1.68 per kg, down US cents 4. In Pakistan, prices were hiked PakRs.7 to PakRs.162-167 a kg or at US$1.59-1.64 a kg, up US cents 7 on the week.

Spun polyester yarn markets were dampened by continuous fall in polyester fibre prices. Trading was still sluggish and spinners in China kept operation rate low as polyester yarn prices softened amid limited offtake. In Pakistan, trading continued to improve on the domestic yarn markets as fabric makers saw fresh export orders. In China, 32s polyester yarn were on the either side of US$2.14 a kg and 45s at US$2.32 a kg. In India, polyester 20/1 yarn was traded at US$2.57 a kg and 30/1 at US$2.67 a kg.

Courtesy: Weekly PriceWatch Report and Daily Textile Prices Service

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