Polyester Prices To Witness Minor Corrections Amidst Strong Market Sentiments

Market Intelligence

Polyester Prices To Witness Minor Corrections Amidst Strong Market Sentiments

PTA

PTA prices were nearly stable with minor fluctuations during June first half. Initially prices slipped downward as crude oil values plummeted below US$ 50 a barrel during this fortnight. However, as there were few plant shutdowns for maintenance, the supply concern jacked up the prices. Also, oil prices are showing resilience and there are chances that PTA prices could improve in June second half from the current level. The downstream polyester sector is operating above 80% of the rated capacity and the demand for PTA is good. Thus, supply demand scenario seems to be marginally heavier towards demand side and the spot PTA prices might get sizable support in the coming weeks. Current spot market offer prices for PTA are around US$ 615-625 per metric ton CFR CMP but buying prices are around US$ 610-615 per metric ton. Outlook for PTA prices indicates towards a stable to strong price trend in the coming fortnight.

MEG

MEG prices witnessed strong upward trend during first half of June. Better demand from the downstream and supply concerns have helped the MEG prices during the fortnight. However, several MEG plants have restarted their operation and supply situation has improved towards the end of second week of June. Thus, the commodity prices may not move up too high even though there is support but might remain volatile. Traded volume for MEG remained healthy during first half of June backed by better run rate at downstream polyester sector. Current spot offer prices of MEG are around US$ 785-795 per MT CFR China and traded prices are around US$ 780-785 per metric ton. MEG prices are expected to exhibit a fluctuating trend in the coming weeks.

PET Chips

PET chips prices witnessed marginal upward trend backed by the changes in the raw material prices during first half of June. The prices of PTA is showing upward trend backed by tight supply while MEG prices have gone up too. However, supply of PET chips are adequate to cater to the demand and hence, price hike in PET chips may witness strong opposition. The demand for the commodity has picked up as summer is on but unless it improves further chips price would remain stable (provided cost support remain at current level). Current Water Bottle Grade PET chips offer prices are around US$ 920-930 per MT FOB China while deals were done around US$ 910 - 915 per MT FOB China. Fiber grade chips quoted prices are around US$ 882-895 per MT FOB Korea. Chips prices are expected to move in line with raw material prices in the coming weeks.

PSF

Export offers for PSF remained almost stable during first half of June. However, there were changes in the polyester raw material prices during the fortnight which might offer support to price hike in the coming weeks. But demand for PSF has slackened and inventory levels are growing while plant operating rates are moderately high. On the other hand, the margin for the fiber suppliers is positive and there are room for absorbing cost pressure. In Chinese local markets, trading activities for PSF has witnessed some decline during the fortnight while fiber prices and inventory levels have witnessed upward trend. In Indian local markets, PSF prices were changed marginally and may witness weakness in the coming weeks as GST (Goods and Services Tax) are going to be rolled out from 1^st July 2017. The high GST on PSF (@18%) would work as a negative factor as cost of PSF made goods would go up for consumers. Current offered price for 1.4 denier raw white semi dull PSF is around US$ 1.04 – 1.06 FOB China/Taiwan. CNF India prices are around US$ 1.08 – 1.10 per kg.

Prices of PSF are expected to witness minor corrections in the coming weeks.

PFY

Polyester Filament Yarn prices witnessed marginal price hike due to the cost support during the first half of June. The upbeat in PTA/MEG prices have helped the filament yarn producers to marginally revise prices. The demand for filament yarn has dwindled a bit and current plant operating rates are well above 80% of the rated capacity. However, the inventory level has been under manageable situation and buying might improve as yarn prices are looking up. Also, raw material prices might improve further and support further price hike in the coming weeks. This should provided ground for healthy traded volume in the next fortnight. Prices of PFY in Chinese local markets have increased marginally during the fortnight while Indian market witnessed a weaker price regime as GST rate on polyester yarn has been kept on the higher side (18%). Current quoted price for 115D/36F POY is US$ 1.02-1.04/kg FOB China/Taiwan, 150D/48F POY price is US$ 0.90 - 0.91/kg FOB, whereas 75D/36F DTY price is US$ 1.44-1.46/kg and 75D/72F FDY price is US$ 1.04 – 1.05/kg FOB China/Taiwan. PFY market forecast indicates that yarn prices would witness marginal corrections as raw material prices have changed.