Polyester chain prices have clearly rebounded in the last seven days, being boosted by a need to replenish stocks which had been depleted during the previous fall of prices. Demand could however rapidly vanish if Washington and Beijing fail in finding an agreement over their trade conflicts at the end of the week.
Polyester intermediate prices have continued rising in the last seven days, although increasing at a slower pace this Monday, as a clear sign that the rally could rapidly end.
Demand has rebounded from downward processors over a need to replenish stocks.
The positive anticipations have been triggered by new hope that Washington and Beijing could find an agreement over trade tensions at G8 summit, at the end of the week.
PTA prices have gained 10$ or 1.4% in the last seven days on the international market in the Far East whereas domestic prices were even rising 365 yuan per metric ton in China or 6.6%.
MEG prices have respectively increased by 3% and 4.6% on international and Chinese markets in the meantime.
With crude oil prices sharply rebounding over US-Iran tensions, naphtha, mixed xylene, ethylene and paraxylene prices have easily recovered.
Operating rates have been very rapidly raised at PTA plants with stronger polyester production absorbing the larger PTA output.
The polyester chain is actually supported by the stability of cotton prices which have not fallen in line with PSF prices in the past weeks.
As a result, demand for polyester is stronger than ever, as everyone is looking for cheaper material costs in the textile-apparel chain.
The share of polyester in blended yarns is rising, therefore supporting prices.
However, any change in anticipations could result in prices returning to lower levels, in case discussions between China and the United States would fail, meaning that Washington could apply 20% additional tariffs on its clothing imports from China.
In this case, polyester prices would inevitably tumble.
Source: Emergingtextiles
