16 May 2005 10:46 [Source: ICIS news]
SINGAPORE (CNI)--Asian spot prices of monoethylene glycol (MEG) and purified terephthalic acid (PTA) fell sharply last week, owing to extremely weak demand and rising inventories among sellers.
MEG prices plunged by $100-130/tonne to $660-670/tonne CFR China Main Port (CMP) last Friday compared with early May, while PTA values slipped by $70/tonne to $670-680/tonne CFR CMP in the same period.
Some market players attributed the steep price decline to weak demand in the key Chinese market.
Profit margins of polyester fibre and filament yarn producers have been thin for the past few years, but the acute fall in feedstock costs recently have further dragged down fibre and yarn prices.
Consequently, sentiment has become extremely bearish in the whole industry, and demand for PTA and MEG has weakened considerably.
The imposition of new trade barriers by the European Union and the US against certain Chinese textile imports has also weighed heavily on the industry. Late last week, a trade war between China and the US loomed, when the Chinese government said it reserved the right to retaliate against the re-imposition of textile import quotas by Washington.
With inventories mounting among PTA and MEG sellers, market players generally expressed little surprise that prices have tumbled. They expect prices to fall further in the next one to two weeks.
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