Feedstock paraxylene markets will continue to support downstream polyester segment for some time since more and more PTA capacity will come on stream while paraxylene supplies will remain short until new capacities come on line. Q3 and early Q4 will see demand from PTA for paraxylene firming rapidly. PET or polyethylene will drive the markets while textile filament will remain subdued. However, poor demand for polyester fibre is likely to weaken further in coming few weeks until prices stabilize at low level. This poor show will emanate from low cotton prices.
In the week of 8 August, Asian paraxylene prices rose on the week amid active short-covering for September cargoes. Although supplies are short, US-based Vinmar International will begin supplying 200,000 ton a year of orthoxylene into Asian markets from end-August, which were earlier expected to begin in early August. In Europe, spot paraxylene market was also assessed tracking Asian market. Asian paraxylene markers surged US$39-40 week on week assessed at US$1,408-1,409 a ton FOB Korea and US$1,431-1,432 a ton CFR Taiwan/China. European spot price was assessed at US$1,300 a ton FOB ARA, up US$15 on the week.
Following paraxylene steps, Asian purified terephthalic acid prices rose on the week after PTA producers adopted paraxylene-linked formula to settle their PTA prices. There were no spot discussions heard on European PTA markets as contract for July was not settled due to the absence of the full paraxylene contract settlement. PTA was dearer US$7 on the week to be assessed at US$1,012.25-1,014.25 a ton CFR China. In China, offers generally stayed at either side of US$1,225 a ton (7,550 Yuan a ton), although a mild climb was seen to US$1,235 a ton (7,600 Yuan a ton) in the latter half of the week.
Polyester chip prices edges down over the week as trading was insipid. The market was also affected, in semi dull chip market large and medium sized deals were done from time to time and overall sentiment in the second half was warmer. Semi bright chip market mirrored the trend in SD chip market. CDP chip markets were still in stalemate this week and downstream CDP yarn market was unfavorable. In China, offers for semi dull chips were at US$1,485-1,525 a ton, down US$20 from last week; while offers for super bright chip were at US$1,480-1,485 a ton, down US$30.
Polyester staple fiber markets were caught between firming upstream cost and sluggish downstream demand. As a result, bearish sentiment prevailed increasingly and participants were mostly on the sidelines. In China, PSF trading was still sluggish despite discounts offered, and prices moving down slowly. In India and Pakistan, PSF prices rolled over as feedstock prices were still high, and downstream yarn makers reporting falling margins. In China, 1.4D direct-melt-spun PSF fell to US$1.56-1.57 a kg, down US cents 1-2 in Jiangsu and Zhejiang. In India, PSF prices were steady at US$1.69 per kg, down US cents 2 due to weak currency. In Pakistan, prices in Karachi were at PakRs.155-160 a kg or at US$1.57-1.62 a kg, unchanged from last week.
Spun polyester yarn markets saw increasing availability of low-priced goods due to increased inventory pressure and slow offtake. Upstream polyester fiber prices after rising in July were seen flat to declining this week, with yarn prices being however unable to fall in the same trend. Thus, gross margins of polyester yarn producers therefore improved in China and Pakistan. Demand for spun polyester yarn is not likely to improve in the short term due to persistently weak terminal demand. Therefore, prices are expected to be flat on rigid demand in coming week.
In Qianqing, 32s spun polyester yarn was mainly priced at US$2.19 a kg, unchanged from last week. In India, polyester yarn 20/1 prices rolled over at US$2.57 a kg and while 30/1 sobered US cents 3 to US$2.67 a kg. In Pakistan, spun polyester 30s yarn was pegged at US$2.61 a kg while 60s was at US$3.40 a kg, both rolling over from last week.
Courtesy â€“ Weekly PriceWatch Report and Daily Textile Price Service
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