Polyester prices have begun decreasing in the last days in China, as a clear sign that they will possibly drop in the coming months, over an expected decline of material costs and a slowing down demand from fiber processors in China and elsewhere.
Polyester fiber prices have begun clearly declining in the last days in China, over a lack of demand from downstream processors.
The benchmark indicator for polyester staple fibers has lost 150 yuan per metric ton or 1.7% in a single week, after staying stuck at the same levels for nearly two months, mostly due to lunar year holidays.
Room for lower prices
PSF prices have been slightly fluctuating below 9,000 yuan in the first months of last year before surging above 11,000 yuan in the summer, and later returning to their initial level.
This new decline could be the sign of a long-term drop of polyester prices, amid rising capacities and slowing down sales.
Raw material costs of fiber producers have also decreased in the past days, especially PTA which accounts for about two-thirds of the materials being used at polyester plants.
If considering the long term trends, PSF prices are still at relatively high levels, as reflected by our below chart, letting ample room for lower prices if PTA and MEG prices would fall.
Oil prices could fall
Crude oil prices have recently rebounded, but they are widely expected returning to lower levels, due to a slowing down global economy and also due to surging competition from US shale gas.
As a result, PTA and MEG prices could fall in the coming months, allowing fiber producers to lower their offers.
Polyester filament prices have already experienced a more significant decline than PSF prices in the last seven days.
Benchmark indicators have lost 150 to 200 yuan per MT.
Operating rates have returned to their levels before holidays at fiber plants, which could also pressure prices.
Source: Emergingtextiles
Source: Emergingtextiles
