Raw material costs of polyester producers could now rebound, in line with a sharp decline of operating rates being planned at MEG plants. PTA producers could however accept lower prices after having sharply reduced their offers in the past two weeks.
Raw material costs of polyester fiber producers were slightly rising this Monday in China.
After sharply falling in the last week, PTA prices have regained 70 yuan per metric ton or 1.3%, eventually losing 400 yuan or 6.6% in the last seven days.
From 6,655 yuan two weeks ago, PTA prices have fallen to 5,620 yuan, plunging by more than 15%.
Such a sudden decline had been expected after the material costs of PTA producers had previously tumbled amid excess inventories in the paraxylene industry.
Paraxylene prices have however stopped falling in the past days with PX Fob Korea returning to 855$ this Monday and up 1.7% in a week.
The PX/Naphtha spread has improved after crude oil prices have sharply fallen in the last week, over a new rise of US shale gas production.
PTA producers continue benefiting from ample margins, and could accept lower prices.
Operating rates are far from falling at PTA plants in China, reflecting the good level of margins in the PTA industry.
Demand could decline from polyester producers who are now lowering their operating rates after their prices and margins have heavily fallen in the past weeks.
PSF prices have lost 13.3% in four weeks.
If PTA prices have sharply dropped, MEG prices are now resisting, after previously experiencing a dramatic decrease.
Confronted with negative margins, MEG producers are sharply cutting their production levels around the world in order to revamp prices and margins.