Crude oil prices rose sharply this week, particularly on Friday, posting the best percentage weekly gain in nearly 7-1/2 months as the US$ slumped and China posted strong economic data fuelling hopes for greater oil demand. Data showed revival of growth in China's manufacturing sector. The official purchasing managers' index rose to 53.8 in September from 51.7 in August, well above the median forecast of 52.0 in a Reuters’ poll of economists. US data was mixed. Construction spending rose unexpectedly in August, while September consumer sentiment improved slightly but remained at its weakest level in more than a year. In USA, lower jobless benefits claims and supportive manufacturing data boosted crude futures and allowed prices to post the strongest quarterly rise since the fourth quarter of 2009. In Europe, support came as a strike at France's oil hub of Fos-Lavera, which squeezed supplies to refineries entered a fifth day and spread to other ports, boosting fuel prices across Europe. The benchmark West Texas Intermediate November futures contract settled at US$ 81.58 a barrel gaining US$ 3.47 (or 6.7%) over last week while in London, the Brent crude, ahead of US futures, settled at US$ 83.75 a barrel on the ICE futures exchange up US$ 2.36 (or 6.4%) from last week.
Polyester Chain: Buoyancy across the chain
Ethylene supplies were still tight in Asian markets escalated by technical problems at Saudi Aramco plant which reduced supplies, thus boosting prices. Shortage of ethylene feedstock at Taiwan's Nan Ya Plastics also reportedly helped spike prices. Costly naphtha too provided good support. Paraxylene markets made some upward correction in prices supported by bullish sentiments from downstream segment and good cost support. Mono ethylene glycol prices spiked in Asia as the NE markets resumed operations after the holidays last week, tracking the sharp increase in ethylene prices. Asian PTA markets firmed up driven by the surges in paraxylene and MEG prices. Post-holiday PTA market also saw big jumps in China, with inquiries increasing amidst fewer offers. Polyester chips prices jumped in Asian markets on support of rising MEG and PTA prices and improved demand from polyester markets. Polyester filament yarn markets surged ahead in Asia with prices increasing significantly in China and Malaysia/Indonesia just before the week long National Holidays in China. The Asian polyester staple fibre market too continued to remain buoyant on support of rising upstream costs and improved demand from downstream spinning segment.
Nylon Chain: Firm stand
Benzene markets were mixed with Asian and European prices on the uptrend and those in USA weakening despite the escalation in energy values on the back of a weak US$. Reportedly, European October benzene contract was agreed lower than September numbers down as expected by the market and still on the higher side since the market was well supplied and the expectations for October was not strong. Asian caprolactum markets were calm and prices remained stable as demand was steady and feedstock prices ranged bound with China on a weeklong National Day holiday. Nylon chips prices continued its firmness as cost pressure from sustained high prices of inputs was high. Nylon filament yarn prices remained firm with some spec moving up due to demand/supply mismatch while the cost pressure was still heavy. Downstream, demand from mills was passable with cautious replenishments given high prices.
Acrylic Chain: Propylene rise after weeks of decline
After weeks of consecutive decline, propylene prices increased in Asian markets mainly due to uptrend in oil and naphtha prices. Demand was drive by replenishment just before the weeklong National Day holiday in China. However, the uptrend was limited by increased availability of deep sea cargoes. Acrylonitrile markets in Asia were range bound although spot prices slid up and down as some buyers stocking at lower prices before the National Day holidays in China. Supply and demand fundamentals were passable. Asian acrylic fiber markets were range bound on flat demand which was were hard to pick up. Downstream spinners were pessimistic over the future trend.
Viscose Chain: VSF and VFY dearer
The NBSK Index value at was down US$ 0.21 a ton (Euro 19.71) on the European market while the same in US market was steady at previous week’s level. In China, the BHKP Index was down US cents 89 a ton from last week. In China, the cotton linter market prices surged significantly after Mid-autumn Day holiday pulling up the cotton pulp market. However, the overall sentiment was sluggish due to pulp producers being reluctant to offload the limited stocks, while some kept off the market. Viscose staple fibre markets were bullish on support of surge in demand and increased cost support. Viscose filament markets in China were pushed up by rising feedstock cost and prices increased significantly. Most producers raised their offers and distributors and agents held limited stocks.
Cotton: Global cotton indices at new high
Cotton prices were mixed trend after news indicating India would begin cotton export from November. Cotton futures slid as profit taking brought the price below US$ 1 a pound and through key support levels that set off automatic sell orders. The Cotlook ‘A’ index gained US cents 5.50 per pound while the China Cotton index gained RMB 2,448 a ton. The East Texas and West Texas cotton prices were also up US cents 1.50 per pound. The Karachi Cotton Association spot rate increased Pak Rs 280 per maund while prices of most Indian varieties of cotton were stable and few lost `500-800 per candy.
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