Fibre to yarn pricing trend in December

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Cotton prices in India continued to surge in December despite the usual peak marketing season. Spot prices were up INR1,490-5,015 per candy during the month, with benchmark Shankar-6 traded at INR39,925 per candy on an average. Daily arrivals were restricted to around 1.50-2.00lakh bales in a month where they usually touch 3.00 lakh bales. This was pushing millers into panic buying as framers were holding crop back in anticipation of a price boost later. Also crop production is likely to be smaller than expected due to pest attack in major cotton growing state of Maharashtra.

Outside India, global spot benchmark, Cotlook A index 8% or US cents 6.50 to notch a seven-month high at US cents 87.20 per pound.

US Cotton futures on the ICE also hovered close to seven-month highs as sustained speculative demand helped March contract gain for nine straight weeks. Cotton contracts for March averaged US cents 76.70 per pound after matching all-time high for the contract at US cents 78.07 per pound in the first half of December. The surge was due to combination of spec and trade buying continued to chase values higher, expert stated also adding that the current bull run had little to do with cotton availability, but was more to the result of mills having accumulated a record amount of unfixed on-call sales.

In China, spot cotton market showed some improvement on the back of the surge in imports, but prices remained slightly low. Xinjiang-origin grade-3128 cotton in Henan were quoted at 15.60-15.70 Yuan per metric ton (US cents 108 per pound). Meanwhile, the China Cotton Index moderated 174 Yuan to 15,764 Yuan per metric ton.

In Pakistan, buyers sought all grades of cotton during December which kept physical prices firm and forward deals fortified their long positions. The KCA rate gained PakRs412 at PakRs7,057 per maund. Meanwhile, cotton imports from India was delayed due to procedural delays and issuance of permits that are valid from 1 January, cotton import will take off then.

Cotton Yarn

Cotton yarn markets were active in India and Pakistan where prices jumped on support of firming cotton while in China they were slightly weak in amid moderating transactions. Cotton yarn 16s was offered at 15.25 Yuan a kg (US$2.32 a kg) and 32s at 23.11 Yuan a kg (US$3.51 a kg) in Shengze. In Pakistan, cotton yarn prices began moving up sharply on the domestic market, due to fresh surge in cotton cost week after week. Cotton import prices also increased sharply due to the surge of international prices and the fall of the PakRe. In Faisalabad, 32s cotton combed yarn rose PakRs4 to PakRs143-158 per pound (US$2.19-3.15 a kg, down US cents 3-4 due to weak PakRe). In India, 30s combed cotton yarn for knitting were at INR191.75 a kg (US$2.99 a kg, up US cents 3) while export offers jumped US cents 8 to US$3.07 a kg.


Polyester staple fibre prices edged down in China, rose in Pakistan and India during December. Upstream PTA cost was seen moderating later in the month while MEG remained firm at higher level. In China, PSF offers fell but strong currency negated the moderation. In Jiangsu and Zhejiang, offers for 1.4D direct-melt PSF were at US$1.33-1.36 a kg. PSF market in India moved sideways with sidelinedstance and offers averaged INR90.25 a kg for 1.2D or US$1.41 a kg and 1.4-2D at INR93.50 a kg (US$1.46 a kg). In Pakistan, producers lifted offers while weaker PakRe made imports costlier. 1.4D PSF prices were at PakRs.140-142 a kg (US$1.28-1.30 a kg, down US cent 1 due to weak currency), while import prices were up at US$1.18 a kg, CNF Karachi.

Polyester yarn prices were down across India, Pakistan and China during December, irrespective of change in PSF cost. Offers for polyester yarn in China were down US cents 2-4 in December with 32s at US$2.03 a kg while 45s fell to US$2.18 a kg. In India, polyester yarn 30 knit yarn fell INR 5to INR139.75 a kg or US$$2.02 a kg, down US cents 6 in Ludhiana market.

Polyester intermediates

Purified terephthalic acid markets after moving higher entering December gradually moved into a weak zone later in the month as prices remained flat to down in the second fortnight and moderated in the week before Christmas Day holiday. Prices could not be swayed away by the recovery in paraxylene markets. In China, spot PTA prices were firm as suppliers kept offers for bonded goods and for nearby-month cargoes unchanged. In US and Europe, demand for PTA was flat pegging prices stable. Asian PTA marker, CFR China were 4% or US$26 higher in December, due to earlier rise, to US$715-717 per ton. In India, prices were at US$740 per ton CIF.


Mono ethylene glycol prices in Asia were up in December but the hike was moderated by weakening demand from the downstream industry. MEG spot prices inched up US$19 on the month with CFR China at US$920-925 per ton and CFR South East Asia to US$942-947 per ton. European MEG spot truck prices slipped as markets ended on a quiet note ahead of Christmas break. Truck spot prices were assessed at a decrease of Euro 20at Euro 863 per ton. In US, MEG prices were stable as there was some demand coming from the de-icing and antifreeze sectors due to winter weather.

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