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Polyester production under pressure as crude oil prices accelerate
11
Jun '08
Sky rocketing crude oil prices have once again pushed up the spot prices of polyester raw materials like Ethylene Glycol (EG) and PTA. This in turn has driven June offer for polyester fibre up by 2 Taiwan yuan per kilogram. DTY prices from lower plants have also depicted an upward trend.

To add to the already chaotic situation, appreciation of NT dollar has nearly stagnated the inflow of orders for textile and garment manufacturers.

While EG spot prices in Far East area were at US $1,120 per ton, up by 2.5 percent from last week, PTA price rose by $20 to touch $1,075 per ton due to sudden price increases in Paraxylene (PX).

Market analysts believe that although EG prices are likely to remain stable at $1100 per ton this year, profits from PTA may not accrue due to soaring crude oil and PX prices. Moreover, Mitsubishi Chemical of Japan and Ningbo Sanling of China have also announced a cut in Asian production due to overhaul resulting in a 20-30 percent reduction in the two countries.

On the other hand, PTA production capacity in Indonesia is also likely to show a cut of 5-10 percent and a closure of manufacturing units if profits continue to get squeezed.

Fibre2fashion News Desk - China

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