Crude oil - Strong US$ Pushes Oil down
Crude oil futures slipped this week despite the strong GDP growth in the fourth quarter of 2009. Earlier in the week, China's weak refinery demand and slumping tech stocks work against oil prices which oscillated around US$73 a barrel.
Tweet-- U.S. gross domestic product grew at a seasonally adjusted 5.7% annual rate in the fourth quarter, the fastest pace in six years. However, markets believe that the GDP growth may not continue at the same pace in the current quarter and were concerned about China's growth after authorities clamped down on bank lending. Dollar also strengthened against the euro, making oil less attractive as an alternative investment. The dollar gained 0.8% against the euro to $US1.3864 in New York. By the end of the week, oil for March delivery settled at $US72.89 a barrel on the Nymex, the lowest level since December 21. Compared to previous week, it was down 2.2% or US$1.65 while the European Brent for March closed at US$71.46 a barrel, losing US$1.37 or 1.9%.
Polyester Chain: PFY Dearer
Ethylene prices gained further in Asian markets, particularly NE Asia where prices were sustained by replenishments coupled with tight naphtha availability. However, buying interest was low and had started to decline. Prices in SE Asia dipped a bit. Ethylene was dearer in USA while European numbers were steady. Downstream, MEG market sentiment in Asia slumped due to ample supplies and poor economic environment in China as Government tightened credit policy. Prices softened by almost 5%.Paraxylene prices declined in Asian and European markets influenced by falling crude oil prices and weak support from downstream PTA market. Asian PTA market sentiments weakened and prices slumped 3%. Polyester chips prices remained flat and numbers rolled over from previous week with no support from upstream; PTA and MEG. Polyester filament yarn prices were raised in China influenced by the past weeks rise intermediates prices. Although, they were cheaper this week, they were still high from the polyester producers' point of view. Asian polyester market sentiment was in stable‐to‐poor condition and trading was thin. In China, PSF producers raised their offers sharply followed by mainstream prices with small little support from downstream.
Nylon Chain: Benzene fall to six‐week low
Prices of benzene prices slumped significantly across Asia Europe and USA receding back to six weeks influenced by sluggish Asia, crude oil prices. In Southeast Asia, supply was ample as demand from end‐users has been met in Q1. Caprolactam prices slid in Asian markets as benzene prices declined dramatically on increased supply. In China, domestic spot prices softened throughout this week although supplies were still tight amid strong demand. As caprolactum market softened, nylon chip producers' prices remained stable due to overall supply tightness. However, prices are hard to increase due to dip in trading volumes due to approaching of Lunar New Year holidays. Nylon filament yarn producers in China raised their prices despite softening of feedstock cost. However, demand was slowing down and poor buying interest from textile market led to insufficient momentum in price hike.
Acrylic Chain: Acrylonitrile Spurts Again
Propylene prices declined marginally although crude oil slid back to US$73 a ton. Supply was extremely tight in Asia as derivatives producers were running at high capacity of polypropylene, PO, acrylonitrile, acrylic acid, 2‐EH and n‐butyl alcohol and many doing it willingly in view of building stocks in anticipation of further tightening of propylene supply. Asian acrylonitrile prices were up further as the spot markets were in extreme short supply. Supplies are expected to get worse in coming months as major plants will be shut for maintenance in February. Asian acrylic fiber market sentiment was driven up by rising feedstock cost but had no support from downstream market. Thus price increases are hard to last long. Acrylic fibre was dearer by almost 12.5% in Pakistan.
Viscose Chain: VSF Dearer in Pakistan and China
Prices of wood pulp were up a bit across markets with NBSK Index value for softwood pulp moving up US$4.27 a ton on European market while the same in US market was steady. In China, the BHKP Index gained US$5.29 a ton. In Asia, softwood pulp prices were steady while second cut linters in China was dearer. Viscose staple fibre prices were up again in China and Pakistan while Indian offers were stable at previous week's levels. In China inventories with producers' inventories had declined due to big orders traded in the past weeks. Viscose filament yarn market was calm and prices rolled over previous week's numbers in India and China. In China, some producers raised offers for coarse denier yarn but trading prices remained unchanged.
Cotton: Prices Touches 2‐month low
Cotton prices touched 2‐month low this week. Although demand was very strong, supplies were overwhelming from the new harvest, putting downwards pressure on prices. The Cotlook 'A' index was down US cents 1.80 from last week. US futures lost US cents 1.93 per pound. The West Texas lost US cents 0.50 per pound. The China Cotton index lost RMB38 a ton while Karachi Cotton Association spot rate was steady. Indian cotton was cheaper by INR100‐2,100 per candy.
Notes to Editor
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