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Global PFY Prices Expected to Ease as Demand Remains Subdued Amidst Easing Shipping Cost
Global PFY Prices Expected to Ease as Demand Remains Subdued Amidst Easing Shipping Cost

Global PFY Prices Expected to Ease as Demand Remains Subdued Amidst Easing Shipping Cost

  • 28-Mar-2024 3:13 PM
  • Journalist: Robert Hume

Hamburg (Germany): Prices of Polyester Filament Yarn (PFY) are expected to depreciate across the global market during the second half of March 2024. The first half of March saw prices of Polyester Filament Yarn depreciate by approximately 2.5% across the US market and by 2% across the German market. The major exporting Chinese market saw prices of PFY decline by approximately 1.2% during the first half of March 2024.

Despite the crisis at the Red Sea and the reduced transits witnessed throughout the first two months of the new year, the global PFY market was primarily driven by low demand for winter apparel as the winter season terminated. Upstream cost support for PFY was also absent as prices of feedstocks, primarily Monoethylene Glycol (MEG) and Purified Terephthalic Acid (PTA), all witnessed significant decline of approximately 4% and Purified Terephthalic Acid witnessing a depreciation of approximately 3%. This, in turn, eased production costs of PFY across China. Moreover, drought conditions at the Panama Canal have significantly improved. This is indicated as the Panama Canal Authorities increased the number of daily transits to 27 from 24, as the South American continent witness seasonal rainy weather. This latest development in the freight network may have somewhat eased the cargoes of PFY entering the US market.

Moreover, a positive development witnessed in the Red Sea has further led to a temporary ease in the situation. While the Houthis have pledged not to attack Chinese vessels, China is still experiencing significant economic damages because of the crisis. Across the nation, production and shipping have been negatively disrupted, and several companies at all supply chain levels have reported suffering catastrophic losses in the businesses involved in the production of PFY.

While these positive developments have eased freight charges, as evidenced by depreciation of approximately 10% being recorded in the freight from China to US East Coast and 11% in the from East Asia to North Europe, the overall situation remains volatile. The overall situation largely depends upon the influence of China over Iran, as China continues to purchase the majority of Iranian Oil and remains the largest trade partner in the Middle East.

Overall prices of PFY are expected to witness depreciation towards the termination of March as demand conditions remain highly unfavorable as the winter season terminated during the first half of March 2024. This expectation is further bolstered by the continued depreciation in the prices of feedstocks such as MEG, Purified Terephthalic Acid (PTA), and Paraxylene, which are expected to reduce production costs. Moreover, easing freight charges also continue to reduce prices of the cargoes of PFY entering the importing German and the US markets.

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