Polyester chain prices have begun dropping across the board in Asia with PTA however resisting any decline whatever the sharp fall of paraxylene prices. Polyester prices are depressed by the low level in demand which should even plunge after latest tariff threats from US president.
Polyester chain prices have begun sliding across the board in the last seven days, with PTA prices however resisting in the meantime.
The sharp fall of crude oil prices has triggered a similar decrease of naphtha and mixed xylene prices.
The crude oil market prices are depressed by the surge of US shale gas production with global inventories expected to pick up in a few weeks.
On Sunday, US president Trump has threatened to raise import tariffs on Chinese products, extending their coverage at the same time.
Polyester chain prices may be expected to further decline as a result.
Although paraxylene prices have lost another 40$ per metric ton or 4.3% in the past seven days, margins have this time not been further eroded at PX plants in the Far East.
The PX/Naphtha spread had previously plunged over excess supply in Asian paraxylene industry.
By contrast, PTA prices have stayed firm in the last seven days, as producers take advantage of relatively tight supply in the Far East.
Margins of PTA producers have therefore reached high levels.
Being forced to lower their prices due to a lack of demand, the polyester fiber producers have seen their margins falling further.
MEG prices have stopped declining whereas filament prices were significantly dropping.
Polyester producers are however keeping their operating rates at a high level, and demand for PTA is therefore staying very strong, further supporting prices.
Although margins are falling at fiber plants, it is from a record level and operating rates should stay very high.
As a consequence, polyester prices could further decline, especially if PTA prices would eventually begin to fall, in line with the current downward trend on the commodity markets.
PTA futures in China are however not showing such signs of weakness.
Source: Emergingtextiles
