By Malini Hariharan

The polyester chain is feeling the strain of poor Chinese demand.

Weak export demand and Chinese government policy are also impacting this sector, as is the case in polyolefins.

A further factor behind the problems in the polyester chain is the fall in cotton prices, as fellow blogger Paul Hodges points out.

Monoethylene glycol (MEG) spot prices have plunged this week to a 15-month low to $1,015-1,020/tonne cfr China Main Port on panic selling.

Traders have been rushing to offload cargoes to make room for new arrivals, reports Becky Zhang on ICIS news. Chinese tanks are running full with total MEG stocks in the country estimated at nearly 800,000 tonnes.

The volumes would probably have been digested easily in a good month. But demand has fallen in recent weeks, as Chinese polyester producers have cut production on weak margins.

The average sales-to-output ratio for polyester producers has been at 50-70% since early February, as the textile industry is seeing fewer domestic and export orders.

Falling spot MEG prices have had an impact on contract numbers with MEGlobal lowering its April nomination by $20/tonne to $1,200/tonne.

The scene in purified terephthalic acid (PTA) markets is equally serious. Producers are facing a persistent squeeze on margins.

Spot paraxylene (PX) prices were at $1,650-1,660/tonne CFR Taiwan and/or China Main Port on 12 March, while PTA prices were at $1,180-1,195/tonne CFR China Main Port, ICIS data showed.

Assuming a conversion cost of $120/tonne, non-integrated PTA producers were incurring a loss of around $41/tonne on a spot basis.

This has forced some producers such as South Korea’s Samsung Petrochemical to bring forward a turnaround of its 700,000 tonnes/year plant by two weeks to 24 March.

Market players in the polyester chain are now anxiously waiting to see if demand will pick up by end-March or early April, when the textile manufacturing season usually starts.


Turning The US Story On Its Head


By John Richardson THE big US petrochemicals story at the moment is, of course, ...

Learn more

PX Goes Green


By Malini Hariharan Work on commercialising a green route to paraxylene (PX) pur...

Learn more
More posts
Omicron, petchems and the developing world: we might get lucky this time, but maybe not next time

By John Richardson UNTIL ALL of us are adequately vaccinated none of us are sufficiently protected i...

Benzene, the need for a new global Industrial Revolution and the big challenges that lie ahead

By John Richardson THE CHART BELOW shows that 60% of global benzene production in 2021-2040 is forec...

Global polypropylene could also move from inflation to deflation in Q1 next year

By John Richardson WE ALL NEED TO ASK ourselves whether the global patterns in polyethylene (PE) and...

Global polyethylene could move from inflation to deflation by as early as Q1 2022

By John Richardson THE BALTIC DRY INDEX, one of the excellent barometers of overall economic activit...

As China coal shortages end, polyolefins margins reach historic lows on oversupply

By John Richardson AGAIN, DON’T say I didn’t tell you. In my 11 October blog post, having talked...

Dip in Chinese PP exports only temporary with Q1 2022 resurgence looking likely

By John Richardson TRADE DATA when combined with price assessments, supply and demand estimates and ...

Global polyethylene supply could lengthen, becoming a buyers’ market, sooner than many people think

By John Richardson RARELY, IF EVER, have events felt so bafflingly complex in the global polyethylen...

China could either see net imports of 63m tonnes in 2021-2031 or net exports of 18m tonnes!

By John Richardson CONFUSED BY the above chart? Once again I certainly hope so, provided confusion i...


Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more


Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more