PTA and MEG prices have fallen in China after authorities have decided to lower VAT as of April 1st in order to support industrial production. Demand remains strong from polyester fiber industry where operating rates have continued rising in the past week.
Polyester intermediate prices have stopped rising in Asia and have even begun slightly dropping in the last week on China’s domestic market.
Although crude oil prices have further increased in the last seven days with New York’s WTI being up 3%, polyester chain prices have lacked steam.
Anticipations of larger supplies later this year are maintaining market participants on the sidelines, as far as possible.
With new production lines expected to raise capacities, PTA and MEG prices could further decline in the second quarter.
The official announcement than VAT will be cut from 16% down to 13% for industrial products as of April 1st has also been anticipated by sellers who have lowered their price offers accordingly.
PTA and MEG prices have respectively lost 2.9% and 2.2% on China’s domestic market, however not so clearly falling on the international market where they have only dropped 0.5%.
Operating rates are kept at high levels in China where they are still reaching 86% in the PTA industry.
Demand for PTA and MEG remains strong after operating rates have respectively risen to 88% at polyester filament plants and 86% at PSF plants.
Profit margins in the PTA industry have stayed firm after following a slight fall of paraxylene prices in the last two weeks.
Source: Emergingtextiles
