For the Far Eastern economies, finished inventories are still low, and with the textile season coming up there would be build up of downstream demand. This is evidenced by the fact that textile grade resin sales to output ratio has increased to over 100% over the last couple of weeks, as downstream customers try to cover their order backlogs. Further there is also a notion that price increases are inevitable, so purchasing activities have increased. Production levels remain very healthy and it is reported that finished product inventories remain low.
In the North American market, the operating rates are very high at the 100% level due to strong demand from the fiberfill and the non-woven sector. Further finished goods inventories are declining, which shows that demand pull is considerable. Even though the staple imports have declined by 30-40%, however, it appears that with finished goods inventories decreasing, imports could go up. It is worth noting that polyester staple prices have gone up consecutively over the last 7 months, and February experienced a 7-8 cents increase and March is in the region of 8 cents. This is unprecedented, and current circumstances dictates that prices should further go up. For West Europe, the downstream demand is a little variable, with good demand in non-woven’s but average for hygiene business as well as automobile sector. However, with a limitation on the supply of PTA, the supply and demand fundamentals are pushing up the prices gradually. Further raw material pricing is somewhat steady with PTA strong but MEG a bit lackluster, thus ensuring a stable composite cost.
