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the snowstorm effect was undercut by China’s central bank raising reserve requirements for its banks for the second time this year to curb lending and avoid asset bubbles from forming in an overheated economy. China is the second largest importer of oil, after USA. Prices were also affected by firming US dollar and concerns over vague statements made by the European Union regarding its support for Greece. A pledge by EU leaders to do whatever to keep Greece from sliding into default took some of the pressure off the euro, but markets were concerned at the lack of detail about any rescue plan. The crisis in south Europe also threatened economic recovery in the EU and further dampened optimism for energy demand.
By the end of the week, oil for March delivery settled at $US74.13 a barrel on the Nymex, up 4% or US$2.94 while the European Brent for March closed at US$72.90 a barrel, gaining US$3.31 or 4.8%.
Polyester Chain: Prices Unchanged
Ethylene prices edged down in Asian markets for a second consecutive week from a 17‐month high of amidst weak demand from derivatives and concerns over sustained price downtrend. The weak buying interest from China ahead of the Lunar New Year holiday also arrested ethylene’s price while availability enhanced from the Middle East. However, ethylene was dearer in USA. Paraxylene prices too declined further in Asian and European markets as demand was mute from downstream segment. Derivative MEG prices in Asian markets were stable as they rolled over previous week’s numbers. The market sentiment was calm after a steady improvement seen and prices gaining in the previous week. PTA prices softened in China while they were stable in other Asian markets. Market sentiments were calm without much activity. Despite PTA in lackluster and MEG adjusting downwards PET chips prices remained stable rolling over previous week’s numbers. In China, the market players were contemplating the trend post Spring Festival. Asian polyester markets (both filament and staple fibre) were stable with prices rolled over previous week’s numbers as China proceeded for a week long Lunar New Year festival holidays.
Nylon Chain: Benzene Cheaper
Benzene was cheaper across markets of Asia, Europe and USA although crude prices gained 4% over the week. The downtrend is attributed to weak demand and closure of markets in China for almost the week. Despite this weakening caprolactum markets remained calm and prices rolled over from previous week’s level. However, downstream demand from nylon producers was weak as China proceeded for a week long Lunar New Year holiday. Nylon chip prices were stable amidst weakening demand and firm caprolactum values. In China overall prices remained firm while low‐priced goods were limited amidst mute trading before holidays. Nylon filament markets in China and India were steady on support of firm input costs of caprolactum and nylon chips.
Acrylic Chain: Acrylonitrile Stable
The slide in propylene prices continued, but marginally, despite crude oil valued gaining 4% on weekly basis. The drop was due to sluggish demand and bearish outlook from the downstream markets ahead of the Chinese Lunar New Year holidays. The almost flat propylene prices in Asia supported downstream acrylonitrile values with prices remaining stable in most Asian markets while some upward movements were seen in import values in China. Asian acrylic staple fibre market was quiet as demand was mute in China with downstream spun yarn producers closed for holidays. Acrylonitrile prices, although did not change they were still at high level.
Viscose Chain: Pulp Costlier
Prices of wood pulp gained dramatically across markets with NBSK Index value for softwood pulp increasing by US$12.57 a ton on European market while the same in US market gained US$27.75 a ton. In China, the BHKP Index gained US$23.50 a ton. In Asia, offers for wood pulp were steady while second cut linters and cotton pulp prices were stable in China. Viscose staple fibre markets were steady in China, Pakistan and India with prices rolling over previous week’s numbers. Viscose filament market sentiment in China was weak while that in India was stable. Prices in both the markets rolled over previous week’s numbers.
Cotton: Price Billows
Cotton prices soared across markets this week as production is estimated to have grown at a slower pace than consumption. This is expected to result in stocks declining 14% by July 2010, the lowest level in 6 years. Cotton futures billowed US cents 4.77 per pound while the Cotlook ‘A’ index gained US cents 3.60 per pound. West Texas and East Texas cotton gained US cents 4.75 per pound. The China Cotton index was up RMB27 a ton while the Karachi Cotton Association spot rate spurted PakRs.250. Indian cotton was dearer by INR100‐400 per candy.
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