Production disruptions caused by fire at major PTA and MEG plants in China pushed up Asian raw material prices in April, triggering an immediate response in polyester chain. The surge was largely for margin protection rather than market fundamentals, but prices moved aggressively, rallying every day. It was also all over again, beginning with crude pricing with fire a spontaneous trigger. Crude oil prices rose week after week in April and gained US$3-6 on the month. The sharpest rise was witnessed in the week of 17 April when oil markets registered a straight five-week gain, which at 7.9 percent was the biggest since February 2011. Brent's 9.6 percent weekly gain was its biggest in more than five years as Middle East turmoil and signs of lower US production lifted prices. For April, US Futures averaged US$54.06 a barrel and Brent at US$59.44, both up 13% and 6% respectively, from March. Asian naphtha for April averaged US$551 a ton up US$21 from previous month. In Europe, naphtha market stabilized amid balanced supply, a potential uptick in demand from petrochemical end-users and an arbitrage to Asia that remained open from the Mediterranean throughout the month.

Tight supply continued to support Asian ethylene markets and prices jumped over US$200 a ton in April. The diverse movement between Northeast and Southeast continued amid unbalanced demand-supply situations. In US, ethylene spot climbed after upsets as Williams is yet to complete expansion restart in June. CFR SE Asia numbers were up 18% from March while European spot jumped 23 percent and 3 per cent in US. Paraxylene prices jumped amid strengthening upstream and downstream markets in April. US spot paraxylene continued to remain higher on Asian cue despite domestic supply was in excess and demand quiet. European paraxylene eased for the first time in the third week and eased further in the last week on higher freight. Asian paraxylene marker, the CFR China jumped 8% on the month while European paraxylene gained US$65 a ton FOB Rotterdam.

MEG prices surged in Asian markets in April due to bullish futures and plants explosion in China in the third week of the month higher by 8.7 percent week on week. However, prices slipped in the last week on aggressive selling after six consecutive weeks of increase. In US, MEG spot prices rose to a new 2015 high on improved demand. Asian MEG prices were up 12% in April while European prices climbed Euro 125 a ton FD NWE. MEG in US surged US$50 on the month.

PTA prices jumped 13 per cent in Asian markets on bullish futures and pushed by an explosion at Sinopec's olefins plant which forced shutting down of 600,000 ton a year PTA facility in the third week. European PTA prices were assessed up on higher paraxylene contract price. Polyester chip prices surged on cost support in Asian markets and offers were up US$80 a ton while the same in US were up US$68 a ton. European chip markets maintain flat run on the month.

With cost support strengthening across regions, the polyester filament yarn and staple fibre markets reacted promptly. Prices kept climbing following a blast at plants in China while producers raised offers amid bullish sentiment. Meanwhile traders, holding cautious outlook, avoided chasing higher prices and large purchases. Downstream textile mills reduced buying as liquidity tightened with firming raw material cost. POY prices jumped US$160 a ton CFR Asian for 75D spec 70D POY was dearer by US$66 a ton. The lowest jump was seen in Europe, where 167 dtex POY price gained US$45 a ton. PSF markets saw bouts of price hikes as they mimicked firming cost. Buying sentiment stepped back in the last week of April as traders and yarn makers in Asia were cautious on the sidelines. Polyester staple was US$65 a ton costlier in Asia while they were up US$66 a ton in US and US$45 a ton in Europe.

Courtesy: Weekly PriceWatch Report