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China Sourcing Update (Prices of Chemical Textile Materials) Dec 2016

1. Price indices of polyester soar in December

The price indices of polyester 1 went up sharply in December (see exhibit 1). For example, the price index of polyester DTY rose from 9,200 on 30 November to 10,450 on 19 December, the highest level since August 2014, before closing at 10,425 on 30 December. The surge in the prices of polyester in the month were due largely to a rise in the prices of purified terephthalic acid (PTA), a major raw material of polyester; low inventory levels held by polyester producers; and a strong restocking demand for polyester from textiles manufacturers. Looking ahead, the restocking demand for polyester is expected to fall during late January to mid-February (i.e. the period around the Chinese New Year) when most textiles manufacturers suspend their production. Therefore, we expect the prices of polyester to fall in the near term.

2. Price index of acrylic staple fiber rises

The price index of acrylic staple fiber2 stayed flat at 12,800 throughout November till late December, before rising to 13,300 on 30 December (see exhibit 2). According to the local media, the main reason for the increase in the prices of acrylic staple fiber was a tight supply of acrylic staple fiber due to low levels of inventories held by acrylic staple fiber manufacturers. Looking ahead, the supply of acrylic staple fiber is expected to remain tight in the near term. Therefore, we predict that the prices of acrylic staple fiber will stay at the current high levels in the foreseeable future.

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Content provided by Fung Business Intelligence
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