The sales to output ratio currently is maintained above 100%, which shows steady, but by no means robust, downstream demand in the East Asian and Far East Asian regions. Many market players were of the view that in order to maintain basic margins, amidst stringent Chinese government monitory controls, it may even be necessary to impose production cuts. Inventory had increased to over 20 days, an industrial metric signaling caution. Domestic prices remained on a downward trend in China falling to Rmb 28, 100 from Rmb 30,000/ton in April and this downward trend has continued ever since. Dangers of overcapacity were announced when idle capacity at Xianglu (180 ktpa) and Luoyang (50ktpa) came online. Cotton prices have also been of direct interest to PSF producers and some have remarked that the product substitution to polyester is slowing down, as cotton futures decline. Due to not very favorable market conditions Nan Ya and Tainan were planning cuts in their staple fiber outputs. Since the high season of textiles is nearing an end, the 2011 forecast of PSF does not appear too healthy in the Eastern economies. By contrast the sales of PSF in the North American market have remained reasonably strong, and substitution away from cotton to polyester still remains, particularly in the Mexican region. Non-Woven’s and fiberfill businesses remain quite strong. The major concern for many producers right now is the non-availability of PTA, brought about by the force majeure at BP's plant at Decatur as well as problems at the Cooper River, SC plant. Producers have been able to work around the situation by using inventories and stalling orders, and now are hoping for an immediate resolution to the startup of the Decatur plant. Currently these plants are in startup mode.
A recent non-woven’s exhibitions in Switzerland, observers were convinced that PSF sector of the European economy had fully recovered from the recession and that there was good demand. PSF During 2010 this stood at an estimated 900,000 MT's and is expected to rise. Of this sector hygiene constitutes 37% of the total & wipes 16%. Application of wipes is not only limited to personal hygiene but is extends to domestic duties, healthcare and industrial applications. 2011, Q1 has also witnessed an increase in the construction applications of non-woven’s, which includes roofing and constitutes 18% market share of non-woven’s. Auto sector also continues to flourish given that there are more than 40 parts made from non-woven fabric. May prices were at Euro 2.15-2.20/kg, and there was a downward pressure on PET with low cost imports from Asian economies posing a threat, especially at a point in time when anti-dumping duties on some of these Asian nations is nearing an end. MEG side of the component cost is on steady incline, due to global and regional shortages, which may lend support to the maintenance of PET prices even though lower cost imports do pose a threat. The imports have the potential of countering any cost push price increase.
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