Pressure from both ends for polyester filament traders
14 Dec '07
2 min read
Entering November, with the strength of polyester raw materials prices, domestic prices of polyester filament improved due to the active purchasing power from buyers. In prices, most filament products showed an increase of 500 yuan per ton, with individual products up nearly 1,000 yuan per ton.
But the good time was short lived. Domestic polyester filament market soon demonstrated a significant decrease trend with sales soon slowing down to trickle. Production and marketing rate of many polyester factories declined from 100 percent in previous time to 60-70 percent now, or even lower.
Recalling the recent market movements, the experience of polyester enterprises can be described as two incompatible skies of ice and fire. There are three reasons for such a situation:
First, raw materials of upstream PTA polyester declined. Since the second half of this year, PTA market position has been deteriorating. Current PTA price is at about 7200 yuan per ton, while MEG price still stays at 13,700 to 14,000 yuan per ton. December is an important time to return loans, so polyester enterprises may not have sufficient funds to make further purchase in domestic market, PTA will face greater pressure.
Second, new production capacity is excessive; the market faces one wave of impact after another. In second half of this year, domestic capacity has kept increasing. In order to share the market, expanded factories are bound to suppress their prices. Individual factories offer prices even 400-500 yuan per ton lower than mainstream price in the market.
marketing@alchempro.com
