Polyester prices on the rise

09 February 2004 00:01  [Source: ACN]

PRICES of polyester staple fibre (PSF) and polyester yarn in China and Taiwan had risen by 5-6% and 10% respectively last week from two weeks earlier on the back of a 14% increase in purified terephthalic acid (PTA) and a 16% increase in monoethylene glycol (MEG) costs. And in the case of partially oriented yarn (POY), prices had risen last week to a 12-month high.

A Taiwanese producer was worried that the price rally may not be sustainable in the longer term, as demand from the textile sector was not strong enough. However, a major Chinese producer insisted that demand was strong, and prices would continue to increase in the coming months.

PSF prices for imported material had risen last week to US$1.05/kg cfr China, a 5% increase from two weeks earlier, prior to the Lunar New Year holidays.

Offers had risen to US$1.10/kg cfr China by the middle of last week, to which buyers were responding with US$1.05/kg cfr China.

Domestic prices for PSF were last week at Rmb11 400-11 500/tonne delivered, up Rmb500-700/tonne from pre-Lunar New Year levels. And imported POY had risen last week to US$1.20/kg cfr China, up 10% from two weeks earlier.

Chinese domestic prices for POY also rose, but not as sharply as prices of imported material. POY was at Rmb10 600/tonne delivered, up Rmb200-300/tonne from two weeks earlier.

In the case of drawn filament yarn (DFY), six major fibre producers announced a price increase of Rmb1000/tonne to Rmb10500/tonne delivered. And in Taiwan, prices of POY rose to US$1.70/kg fob Taiwan, from US$1.60/kg fob Taiwan, in the same period. Polyester filament yarn (PFY) prices also increased by 10% to US$1.72/kg fob Taiwan.

The main reason for the rise in prices was the cost push from PTA and MEG, producers said.

PTA costs were last week at US$700/tonne fob Taiwan, and MEG was at US$815/tonne fob Taiwan, each US$100/tonne higher than two weeks earlier.

Another factor behind the increase in PSF, POY and PFY prices was the diminishing inventory levels of several Chinese end-users, a Taiwanese producer said.

However, some end-users which had comfortable inventories were adopting a wait-and-watch policy in an effort to exert a downward pressure on prices, it added.

There were also concerns that if the bird-flu epidemic in Asia escalates, it could affect export orders from the EU and the US, as happened last year during the Sars (severe acute respiratory syndrome) outbreak.

However, a major Chinese producer maintained that the bird-flu epidemic would not pose any threat to polyester fibre and yarn demand.

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