SINGAPORE (ICIS)--Asia polyester prices plunged to a four-year low in line with falling crude and feedstock prices, and the market may remain weak in the near term as the coronavirus outbreak in the world will disrupt global demand and supply chains.
Spot polyester partially oriented yarn (POY) 150 denier (D) prices closed at $0.85-0.88/tonne FOB NE Asia, and spot polyester staple fibre (PSF) 1.4D prices were assessed $0.83-0.85/tonne at FOB NE Asia.
Similar prices were last seen in February 2016, according to ICIS.
The recent crash in crude oil prices exerted downward pressure on most downstream chemical prices, including feedstock monoethylene glycol (MEG), with prices plunging to the levels seen during the 2008 global financial crisis.
MEG and its co-feedstock purified terephthalic acid (PTA) are used for producing polyester yarns and fibres.
The falling feedstock cost prompted polyester producers to slash offers in a bid to boost buying, as most end-users were adopting a wait-and-see stance against the backdrop of the coronavirus outbreak in the world.
“We can drop prices, but the thing is no buying,” a major polyester producer said.
“End-users were not keen to restock cargoes, as they are worried global demand will be hit by the virus,” the producer added.
Limited discussions were heard during the week as the wide buy/sell gap hampered trade.
The ongoing coronavirus outbreak may drag the global economy into recession, which will eventually affect consumption of polyester-made goods such as textile products and garments.
“The polyester market will remain under pressure as buyers are panicked,” a separate producer said.
Focus article by Judith Wang