15 November 2011 06:04 [Source: ICIS news]
By Jenny Jin
Spot domestic prices declined to yuan (CNY) 8,350/tonne ($1,315/tonne) on 14 November from CNY10,400/tonne in mid-September, according to Chemease, an ICIS service in
The price represents a rebound from last Friday’s assessed price of CNY8,200/tonne, which is the lowest recorded this year according to ICIS pricing data, but downward pressure remains.
MEG is primarily used in textile production.
Textile factories in
Textile makers are currently not building up their polyester inventory and are instead procuring cargoes on a need-to basis, market sources said.
Demand for MEG from downstream polyester producers usually peaks in September and October – the busy production months for the textile industry heading towards the year-end holidays.
Some polyester producers in east
Financial pressure in the fourth quarter also hampered buying activities, traders said.
A domestic credit crunch, because of the continued monetary tightening by the Chinese government to curb inflation, has been slowing down trade.
The downward pressure on China MEG prices is unlikely to ease in the next two months, market players said.
“No one knows when prices will reach the bottom,” said a trader, adding that he will defer purchases.
Increased supply, with the expected restart at Taiwanese major Nan Ya Plastics’ two MEG plants at Mailiao in mid-November, is expected to add further pressure on prices.
More than 40% of the total imported volume that month came from the
The strong imports and higher supply in the Chinese market amid a seasonal year-end lull in demand will likely pull MEG prices down further, industry sources said.
($1 = CNY6.35)
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