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Wait-and-see trend shrinks chemical fiber raw materials demand

06
Oct '08
Due to sharp drop in prices of international crude oil, rates of petrochemical-related raw materials like pure terephthalic acid (PTA) and ethylene glycol (EG) continue to decline.

The demand from down stream market has been weak, especially because of the week-long holiday in Mainland China and cuts in production by struggling chemical fiber industry. Orders from the Mainland are shrinking further as traders are adopting the 'wait-and-see' attitude. Thus, up stream manufacturers are showing no sign of recovery in raw material prices.

Even during post-Olympics month, China's demand for textile raw materials did not rebound significantly, but inquiries increased slightly.

International oil price sharply fell from US $147 per barrel to below hundred mark, resulting in big fall of related raw materials prices.

Lately, the PTA spot price is ranging between $850-870 per ton. After falling below US $1000 per ton by the end of July, EG spot price has slumped further to nearly $800 per ton.

Sluggish trend has extended to the already weak chemical fiber market. For example, 75/72 filament was quoted at $73-74 per kg in July, but now is available at around $68 per kg. Reportedly, Denier filament 150 also plunged from $59-61 two month ago to the current $53-54 per kg.

Insiders say that continued decline of crude oil price is keeping the purchase activity dull, even though inventories at downstream sectors are at low level. It has been noted that there is a 'hand to mouth' trend in the market.

Fibre2fashion News Desk - China


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