PXPTAJune52012.pngBy John Richardson

A SENSE of panic has gripped the fibre intermediates chain as a result of falling crude oil prices, an industry observer told the blog.

“Nobody knows where the bottom of the market will be, which, to me, feels a great deal like the crisis in late 2008,” he said,

“Prices are in  virtual free fall. The only good news is that once they stabilise, they will recover as demand growth remains robust. But this, of course, depends on crude settling down.”

He estimates that polyester demand in China will still grow by 6 percent this year, considerably down on last year’s 8-10 percent growth, but nevertheless a decent performance when you consider that polyethylene (PE) is in negative growth territory.

The styrenics industry is an awful mess, also, as a result of the collapse in exports of finished products to the West.

“The good news for polyester is that it continues to gain ground over other synthetic fibres and cotton,” he continued.

But while the long term outlook might, arguably, still be good, Becky Zhang, Asia ICIS pricing purified terephthalic acid (PTA) editor, wrote in her report for the week ending 1 June: “Cash is not a major issue with polyester producers in China, as the government has been relaxing its monetary policy to encourage liquidity and consumption since the beginning of the second quarter of this year, traders said.

“The main problem is the lack of market confidence, players said. The market is immersed in bad news including massive capacity expansions, the worsening situation in Europe, and a slowdown of economic growth in China and India.”

This is the same shift in mood that we detected in the polyolefins industry two weeks ago. China’s plastic converters have become reluctant to borrow money because of anxiety over the global economy, over domestic growth and over local politics.

And, as the industry observer said, prices are declining very rapidly: Paraxylene was down by $69/tonne – a 17 month low – and PTA fell by $37-40/tonne, representing a 19 month low, according to ICIS pricing. 


A Call To Action


We are about to set out on a great journey as the world transitions to the New N...

Learn more

More Of The Same Won't Work


By John Richardson MORE of the same won’t solve China’s problems. &#...

Learn more
More posts
Global polyethylene demand in 2020 could fall by 3.3m tonnes, cost curve analysis turned on its head

By John Richardson NOTHING that’s happened over the last few days that should surprise anyone who ...

Global PVC demand could fall by 1.1m tonnes as coronavirus crisis becomes global

By John Richardson YOU CANNOT stimulate economic activity when factories and offices need to be shut...

China polyethylene imports could be 3m tonnes lower as economy seizes up

By John Richardson IT IS TIME for crisis planning, I am afraid, as a result of the World Health Orga...

Rescue of major conglomerate, struggling SMEs raise risks for China and global economies

The most important issue here remains the human cost of the coronavirus outbreak. My thoughts and ho...

Global polyethylene demand in 2020 at risk of 2.4m decline because of coronavirus

By John Richardson I AM a bit confused this morning following some excitement about the Chinese deci...

Coronavirus: Global polypropylene demand in 2020 could fall by 2.6m tonnes over last year

By John Richardson SOME GOOD news might be that official Chinese state media announced that the numb...

Coronavirus threatens 2.9m tonnes of China PP demand as uncertainties increase

By John Richardson THE RUMOURS travelled around my contacts, and I am sure many of your contacts, fo...

More than 3m tonnes of Chinese polyethylene demand at risk from coronavirus

    By John Richardson THE GOOD news is that medical experts believe the novel coronavirus...


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