Polyester fiber prices have further declined in the last seven days in China and may be expected further sliding after PTA prices have suddenly tumbled in the country. Demand is also expected being depressed in the coming period.
Polyester staple fiber prices have continued falling in the last seven days in China.
Benchmark 1.4D PSF has dropped 140 yuan per metric ton or 1.6%. Prices have fallen 5.8% in only four weeks.
Gross margins of polyester producers have declined in the meantime, as PTA prices were resisting any new fall.
The raw material costs of PTA producers have however sharply decreased, in line with a significant drop of paraxylene prices.
PTA prices have eventually been heavily lowered today in China, being down 505 yuan per metric ton, or 7.6% in a single day.
If confirmed in the coming days, such a fall will allow polyester fiber producers to further cut their price offers.
In addition to the sudden fall of PTA prices, staple fiber and filament producers have benefited from a sharp decline of MEG prices in the last weeks.
With operating rates being left unchanged at Chinese polyester plants over a relatively high level of their gross margins, there is now ample room for a sharp decline of fiber prices.
Only a rebound of demand would limit the fall of polyester prices.
The US decision to sharply raise import tariffs will negatively affect US demand for Chinese PSF which accounts for a large share of total exports.
As a result, and with US demand for Chinese apparel now sliding, polyester prices can be expected further falling.
Source: Emergingtextiles
