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Man-made fibre market review - polyester prices firm in china

Man-made fibre market review - polyester prices firm in china Source:
Date: 10-08-2013
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Further strength in feedstock replacement costs in China last week again supported quotations for polyester fibre and filament yarn. However, a dull offtake was generally noted from spinners and fabric manufacturers.
Rising oil prices pushed spot rates for paraxylene (PX) substantially higher. Prices for mono ethylene glycol (MEG) reacted readily, with stocks of the intermediary currently low. However, purified terephthalic acid (PTA) prices did not respond –overcapacity in the PTA sector continued to limit the scope for those prices to increase significantly.

Polyester staple fibre quotations in eastern China were influenced to some extent by developments in feedstock markets, but the failure of PTA values to advance, along with a sustained depressed demand from spinners limited the scope for price rises in the synthetic fibre.
Moreover, traders expressed the view that the upwards trend in polyester staple fibre values would be quickly reversed if oil prices soften. A slump in demand for viscose staple fibre in China, attributed by some WTiN sources to consumers of the fibre reducing throughput in face of increased summer electricity load-shedding, weighed on prices.  However, inventories remained low and both producers and traders remained convinced that prices could return to a firmer footing in the short term.
Acrylic staple fibre values in that country were again unchanged in quiet market conditions.  A steady price trend is expected to continue through into September. Quotations for most types of polyester filament yarn also reflected the upturn in feedstock values. However, in a slight divergence with the situation on the polyester staple fibre market, the rise in prices prompted some buyers to cover a portion of their nearby requirements, fearing that oil prices could rise further, pushing filament replacement costs still higher.

At times last week, brisk trading was discernible. According to 168tex, stocks of FDY and DTY held by producers in the Shengze region of eastern China fell to 20 and 28 days of sales, versus 23 and 31 days a week earlier.

Despite the foregoing, some extruders adhered to a cautious outlook for business beyond the slow summer period, with the industry still considered to be in a state of overcapacity.Polyamide 6 filament yarn prices faced some downward pressure last week, with feedstock prices ruling steady and not therefore offering support, leaving a sluggish demand as the major market influence.
However, several main producers idled capacity for equipment maintenance in face of electricity load-shedding and tended to maintain offering rates.
Import offers into Turkey were generally revised higher last week (see accompanying table), as suppliers sought to pass on recent rises in raw material replacement costs onto their customers. However, trading activity remained at a low ebb and very little new business was evident at the higher asking rates.Export offers of polyester staple fibre and filament yarn showed signs of strength in Taiwan last week, reflecting recent upward movements in feedstock replacement costs.As was foreseen by WTiN’s sources back in June, the United States filament yarn market turned slower in July, compared with the vibrant trade witnessed for much of the year to date. The slowdown in offtake would seem largely influenced by seasonal factors, with many clients indicating to manufacturers that they will again increase orders in August/September. Manufacturers will await confirmation of that trend and in the meantime continue to operate at close to full capacity. As has been the case for a number of months, business in the apparel, hosiery and automotive segments remained relatively strong during July, with demand from industrial and home furnishing end-users less robust.
In response to increases in propylene prices early in the year, North American spot rates for nylon textured yarn tended modestly higher in June, rising by around 10 cents per lb, with 40 denier commanding around US$3.70 to 3.75 per lb, delivered mill, and 70/68 denier about US$3.75 to 3.80 per lb. Offers of polyester textured filament yarn have been maintained at around US$1.35 to 1.45 per lb, delivered US mill, and at roughly US$1.50 to 1.60 per lb for 70 denier/48f.
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