Polyester Staple Fibre market upsurged amidst rising Covid cases in China

Polyester staple fibre market has witnessed slight fluctuation with an upward trajectory due to the continuing conflict between Russia and Ukraine affecting crude oil prices and growing uncertainties in the South Asian region amid rising speculations around resurgence in covid cases. In the Chinese market, upstream raw material prices have been mixed where the PTA market has been firm and increased by 4.65%, while ethylene glycol declined by 1.03%. As per the ChemAnalyst database, the price for polyester staple fibre in China settled at USD 1255 per ton as on 25^th March.

There were differences in the sanctions and embargo against Russia after Biden visited Europe, which caused the US crude oil price to rise by approximately 6% in the continuing week. On March 27, WTI US oil closed at around 112.30 US dollars/barrel. This rise in the price of crude oil increased the cost of feedstock such as Paraxylene.

The downstream textile industry started strong however has been impacted by the epidemic situation restricting the supply chain. The production companies also revamped with high operating loads regardless of the soaring international crude price.

Meanwhile, offtakes from domestic and offshore seemed sluggish with accumulated inventories. Thus, it was observed that the market of Polyester staple fibre rebounded owing to rising cost pressure from upstream instead of a sudden demand influx. This influence on the trend of the Polyester market is mainly due to the current lockdown imposed by the Chinese government in some provinces impacting the logistics.

On the other hand, China is the largest polyester manufacturing country consisting of the highest production unit, mainly in the Zhejiang region and in the Jiangsu region. In Jiangsu, Polyester staple fibre rested at 3361.32USD/ton, up by 0.75% from the previous year. In addition, the downstream market's overall production and sales performance were light with high availability of inventories.

As per Chem Analyst analysis," Polyester staple fiber market will surge more rapidly with rising oil prices amidst the Russia-Ukraine war. Further, logistics constraint is likely to hamper the shipping cost in the forthcoming period with several curbs in Shenzhen & Yantian ports.