Polyester fiber prices have stayed very firm in the past days in China, by contrast with a significant decline of PTA and MEG prices. The reduction of VAT rates as of April 1st could however result in lower price offers on the staple fiber and filament markets.
Polyester staple fiber prices are now very slightly declining in China, over a sharp fall of material costs.
PTA and MEG prices have significantly declined in the last two weeks, whatever the rebound of crude oil prices.
Chinese commodity prices are currently lowered ahead of a fall of VAT rates as of April 1st.
A 3% VAT cut in the manufacturing industry from 16% down to 13% is aimed at restoring the price competitiveness of China’s exports and boosting domestic consumption at the same time.
Producers have anticipated the decline in prices, explaining why paraxylene, PTA and MEG prices have dropped in the past two weeks.
By contrast, polyester fiber prices are resisting any real decline of price offers, reflecting the stronger demand from downward processors in this period of the year.
Operating rates are currently rising in China’s textile industry, boosting polyester fiber use.
Polyester prices could however more clearly decline in the coming days, as processors will require a fall in line with the 3% VAT reduction.
Source: Emergingtextiles
