Polyester fiber prices have witnessed a sharp decline since last two weeks. The weakness in crude oil prices lead to reduction in PTA and MEG prices which are the raw material for polyester polymer. In last one month PTA prices have come down by nearly US$ 34 per metric ton while MEG has lost about US$ 58 per metric ton in the international market. On the other hand, the downstream yarn market activities remained slack which has created room for negotiations and fiber suppliers were compelled to cut prices. China and India – two largest producers of Polyester Staple Fiber (PSF) have witnessed significant reduction in price across the product line in respective markets.
In Indian, PSF prices witnessed a reduction since mid of May as demand for polyester fiber was slack. Largest player in the country- Reliance Industries Ltd. has announced a marginal reduction of PSF prices in mid-May followed by a substantial reduction of Rs. 6 per kg in beginning of June. This has compelled the other suppliers to follow the path and reduced polyester fiber prices. Also, quoted price of PSF, especially from China, has come down in last two weeks and found to be in the range of US$ 0.99 -1.02 per kg. As Indian rupee is gaining strength against US Dollar, domestic polyester fiber suppliers are increasingly under pressure from competition and margins are squeezed.