As bearish sentiments continue to cast dark covering over the entire chemical fiber industry, prices of most varieties are hitting 11-year low. Producers are caught in great losses and the downtrend is predicted to extend for some more time. For immediate relief, manufacturers may successively start cutting production or plan turnarounds forcing supply tightness to support prices.

The week of 10 March was no different. Beginning from polyester feedstock, ethylene prices declined in Asia due to weak demand. In Europe, they were marginally higher only recouping previous week's losses of the same magnitude. US spot price for ethylene prices declined after February contract price was heard to have settled down from January. Paraxylene prices declined sharply on the week, hit by heavy selling pressure amid quickly falling downstream PTA markets. PTA markets continued to be hit by high inventories amid weak polyester demand. In Europe, paraxylene prices plunged to the lowest level since June 2012 while US March contract price settled down from February and also to the lowest settlement in over three years.

In the polyester intermediate markets, Asian MEG prices were dragged down by weaker PTA futures after a rollover in the first half of the week. MEGlobal nominated its April Asian contract price for MEG at a decrease over March numbers. In US, MEG spot prices were also assessed down while European MEG prices rolled over on flat demand for the second consecutive week.

PTA prices dropped significantly as Asia as the markets continued to be hit by high inventories amid weak polyester demand. The story rolled over to Europe where production rates of PTA plants were still below optimal, as demand was not increasing as expected. In US, PTA prices for March were waiting for paraxylene contract to settle.

With both PTA and MEG declining under pressure, polyester chip markets also met a similar fate. Semi dull chip markets mainly range bound but fell over the week while super bright chip mirrored the SD chip trend.

Asian polyester filament yarn markets were thinly traded as buyers awaited demand to pick while cost support eased significantly as PTA and MEG prices declined. Market sentiment mostly remained bearish and downstream textile units were more cautious about buying. Polyester staple fibre markets, although saw marginal improvement in demand, confidence was still weak and prices continued to soften.

Further down the polyester chain, polyester spun yarn prices were unstable amid continuous fall in PSF, and the buying from end-users was cautious. Yarn makers were keeping feedstock buying minimal due to moderating offtake. Although PSF prices have broken the low record on several occasion of late, spinners have been resisting large volume buying, prompted by weak demand and anticipating further fall in upstream feedstock markets.

Courtesy: YarnsandFibres Weekly Price Watch Report