Ynfx Monthly Price Watch Report – June 2017

Crude Oil

Crude oil prices plunged to 5-month lows in May amid record trading volume in Brent crude, as OPEC and other producers apparently ruled out deeper production cuts to reduce the global bloating inventories and supply glut.Prices were also pressuredon worries that US President’s withdrawal from the climate accord could accelerate US production and flood the global oil market. US crude prices declined 5.3% on the month while Brent was down 4.9%as compared to previous month’s average. US Futures averaged US$48.49 a barrel, down US$2.72 from Apriland Brent averaged US$51.30a barrel, down US$2.63 on the month.Asian naphtha market continued its downward trajectory as cracks declined due to increasing length and softening demand. Reports from traders said that the market is getting weaker. The market remained soft, as cargoes continued to flow out from India, and less-than-expected demand was seen from Taiwan as it had last bought 100,000 ton for H2 June delivery.ForMay, spot naphtha prices fell 7.9% on the month to average US$439.58 a ton CFR Japan. 

Ethylene prices continued to plunge in Asian markets, touching their 16-month lows in May under pressure from rising supply.In Europe, spot ethylene prices declined as markets remained bearish ahead of June contract price.In US, spot ethylene declined amid supply length as all USGC crackers were operational.Prices averaged US$991.00-993.00 a ton CFR SE Asia, down 6.1% from April while European spot edged down 6.9% to average Euro1,038.40-1,043.40 a ton FD NWE. US spot prices were down 1.6% on the month to average US cents 28.33-28.83 per pound FD USG.Paraxylene prices edged down in Asian markets as demand for July was seen weakening and decline in energy complex.In Europe, liquidity in the paraxylene markets ebbed on the month, while volatility increased in line with the energy complex.In US, paraxylene spot prices gained on stronger feedstock.Asian marker, the CFR China averaged US$804.43-805.43 a ton, down 4.2% from last monthwhile European paraxylene fell 4.6% to US$712.00 a ton FOB Rotterdam. In US, spot paraxylene was at US$765 a ton FOB USG, up 0.7% on the month. 

Mono ethylene glycol prices inched up in May on incremental demand in China as polyester plants were restarting.European MEG spot prices were stable in a quiet market.In US, MEG spot was down tracking weaker upstream pricing and improving supply as Indorama was back after turnaround.MEG prices averaged US$724.40-729.40 a ton FOB SE Asia, up 1.7% in Maywhile European spot was at Euro750 a ton NWE FCA, unchanged on the month. US spot was at UScents 30.75-31.75 per pound FOB USG, down 14.6% on the month. Purified terephthalic acid prices fell in Asian markets driven by weaker upstream and domestic markets.In Europe, PTA prices continued to move down as downstream PET markets remained bearish due to weak demand.Prices averaged US$615.20-617.20 a ton CFR China, fell 2.7% from April while European price was at Euro670a ton FD NWE,down 2.9% on the month. Polyester chip markets saw insipid trading atmosphere during the month. Offers for semi dull chips dipped 4.4% to US$949-961a ton and super bright chip slid 2.1% to US$971-985 a ton. 

Polyester filament yarn markets in China saw thinner buying interest in Mayand sellers reduced offers to push volumes out citing bearish future expectations.In India, POY prices were down amid thin liquidity as buyers maintained lowest demand.In Pakistan, selling indications for DTY yarn rolled over, as downstream demand was limited on the back of high raw material stocks.In China, POY 75/72 prices fell US cents 10 a kg at US$1.19-1.22 a kgin Shengze while Indian POY 130/34 prices were  down cents 5 at US$1.46 a kg. In Pakistan, 300/96 DTY prices were at US$0.66-0.71 a pound, unchanged on the month.Polyester staple fibre prices in China moved down as demand was weak and downstream traders and spun yarn makers were cautious to replenish inventories, forcing producers to lower offers continuously.In India, PSF prices were stable during the month.In Pakistan, PSF prices dropped in line with a continuous fall of import offers from China.In China, 1.4D PSF was at US$1.06-1.09 a kg, down US cents 4 from April. In India, 1.2D PSF prices were at US$1.25 per kg, rolling over from previous month. In Pakistan, prices in Karachi were at US$1.18-1.20 a kg, down US cents 2 on the month.

Benzene prices fell in Asian markets in May amid cautious movements and thin demand as buyers continued to hold back.In Europe, benzene spot prices plunged on the month following bearish movement in crude oil markets. In US too, benzene spot declined and contracts settled lower.Asian marker, FOB Korea declined8.1% in Mayto average US$742.50-743.50 a ton while US spot prices fell4.6% to US cents 264.15-264.25 per gallon FOB USG. European spot was down4.6% to average US$810.80-811.80 a ton CIF ARA and FOB Rotterdam. Caprolactam prices continued to remain under pressure on the back of low benzene values and moderate demand.  In China, offers for liquid goods in spot market fell further while values for East European goods softened amid slow liquidity.Downstream demand was moderate with run rates at polymerization units up at 71% and inventory down to 9 days’ worth.Asian caprolactam spot prices averaged US$1,540.00-1,680.00 a ton in May, down 16.8% from last month.Sinopec raised its May nomination to US$1,670 a ton (up US$30) for liquid while Fibrant settled May contract at US$1,660 a ton.

Nylon chip markets continued to remain under weak variation in May on back of falling caprolactum values and low benzene markets. Downstream converters maintained production, leading to rigid demand for nylon chip. In non‐textile yarn sectors, cord fabric makers enjoyed decent liquidity while staple fiber market saw moderate demand and monofilament markets were covered by favorable atmosphere.Offers for Taiwan-origin chips averaged US$1,776-1,860 a ton, down 6% from last month. In China, bright conventional spinning nylon-6 chips were priced at US$1,880-2,014, fell 4.5% from April while semi-dull chips were offered at US$1,884-1,962 a ton, down6.8% on the month.Nylon filament yarn price declinedon relieved cost pressure and cautious buying sentiment. Downstream converters maintained stable operation, implying rigid demand with bargain hunting activities. Warp‐knitting, weaving and AJ covering sectors operated at 75% capacity, while circular‐knitting mills and lacing mills ran at 50% capacities.In China, semi-dull FDY70D/24F was traded at US$2.44-2.50 a kg, down US cents 16 from previous month while FDY40D were at US$2.61-2.73 a kg, down US cents 20.

Propylene prices in May rallied in Asian markets due to supply tightness as major producers planned turnaround.In US, spot propylene was down amid weaker upstream.In Europe, propylene June initial contract price was fully settled at a decrease from the May contract price prompting spot to edge down.Asian marker, FOB Korea averaged US$823.60-825.60 a ton, rose1.8% from April, and CFR China was at US$859.20-861.20 a ton, up 3.2% from previous month. In Europe, CG propylene dipped 5.3% to Euro 791.00-795.40 a ton FD while spot polymer-grade propylene prices in US were at US$36.15-36.95 per pound ton FD, fell13.3%.Acrylonitrile prices edged down in Asian markets on waning demand during the month. European ACN prices were stable to up amid supply tightness.In US, spot ACN was higher amid tightness while Brazilian goods headed to US.European prices were up0.8% to US$1,704.00-1,708.00 a ton CIF Med while US export assessments averaged at US$1,611.00-1,631.00 a ton USG, climbed 0.4% on the month. Asian marker, the CFR Far East Asia inched down2.2% to average US$1,540.00-1,542.00 a ton. 

Acrylic fiber markets in China saw prices rise in May and exports were becoming favorable while producers saw slow sales in a stagnant domestic market.Reportedly, many cotton spinning mills switched their products, while woolen yarn makers were confronted with heavy inventory pressure.In India, insipid demand and sluggish sales, kept ASF prices range bound. In Pakistan ASF prices were lifted as market held modest mindset, awaiting demand to improve in future, despite current lackluster liquidity.In China, offers for cotton-type staple roseUS cents 4 at US$2.25-2.31 a kg and medium-length staple were up US cents 5 at US$2.26-2.32 a kg.Sinopec Chemicals released June list prices for ASF, flat to the previous month with 1.5D pegged at US$2.30-2.31 a kg. Taiwan origin 3D bright ASF tow offers were flat at US$2.00-2.05 a kg. PetroChina cut its May settlement prices by US cent 0.50, with cotton‐type fiber at US$2.25 a kg, medium‐length at US$2.26 a kg, and 3D tow at US$2.29 a kg. Indian offers for ASF were steady at INR148-150 a kg (US$2.30-2.32 a kg).In Pakistan, 1.2D ASF prices were at US$1.94a kg, up US cents 3 on the month. Indian ASF prices were at US$2.32 a kg, down US cent 1 from April. 

Viscose staple fibre prices in Maymoved downin China as producers faced high inventory pressure and offered discounts on final deals.In China, offers for VSF averaged US$2.30 a kg, down US cents 10 on the month.In Pakistan, VSF market extended insipid sentiment, with transactions not improving and prices spiraling down. In India, prices rolled over despite continued short‐covering activities of some converters. In Pakistan, 1.5D VSF prices fell US cents 7 at US$2.30 a kg. In India, producers’ prices were at US$2.23 a kg, dipped US cent 1from last month.Viscose filament yarn offers in China weakened as liquidity was lusterless and downstream buying sentiment was cautious.In India, although prices were flat in INR terms, they were down in US$ terms as exports were still modest.In China, 120D dull VFY offers averaged at US$5.92a kg while bright slipped US cents 3 at US$6.00 a kg. In India, 120D bright VFY was at US$6.10a kg, down US cents 2 from last month. Dissolving pulp markets in Asia saw sentiment stalemated during the month. Offers for hardwood pulp were at US$820-830 a ton while softwood pulp was at US$900 a ton.

Cotton futures on the ICE hit a near-three year high in May, supported by demand from pending mill fixations and fund buying amid stocks tightening.Mills with unfixed sales were trapped by tightening US supplies and bullish speculators.In China, the surge in US futures led to brisk spot trading on the domestic cotton markets. Most ginneries were sitting on lean inventory, and players held bullish expectations over the future trend.The July contract on ICE Futures US jumped2% for the month to average US cents 78.64. The Cotlook A index rose1.5% closing May at an average of US cents 88.25 per pound. The China Cotton inched up 1% on the month to 16,046.40 yuan a ton.In Pakistan, cotton markets were firm while physical prices rose on improved demand of quality lint besides buyers buying better grades of lint at premium. The official spot rate averaged at PakRs6,905.50 per maund ex-Karachi, up 0.5% on the month.Indian cotton markets were mixed with some varieties gaining and some retreating, but finer quality cotton rolling over. Most varieties saw prices plunge 0.8-2.4% in May.            

Cotton yarn markets in China were lukewarm in May and demand still weak with transactions mainly concluded for 21s and 32s yarn.Recently, inventory was piling up at spinning mills, while overall operation rates hovered at high positions, implying bearish market outlook in the short run. With shrinking spot trades, prices likely to continue fluctuating amid sidelined stance.In India, cotton yarn prices rose in Ludhiana, in line with the fresh increase in few specsof cotton prices. In Pakistan, cotton yarn prices remained relatively stable on domestic and export markets while trading activities were reduced with approaching fiscal year end.In China, 32s carded cotton yarn in Shengze market was up US cent 1 at US$3.38-3.46 a kg while 21s combed were at US$3.42-3.49 a kg, up US cent 1 fromApril. In India, 30s combed for knitting were at US$3.31 a kg, up US cents 4 on the month. In Pakistan, 20s carded yarn was at US$2.73 a kg, unchanged on the month while 30s carded were at US$3.09 a kg, rolling over from previous month. 

Polyester spun yarn markets in China were under correction in May as transactions were moderate and some specs saw better sales. In Pakistan, polyester yarn prices generally rolled over in line with range bound PSF markets. In India, offers for spun polyester yarn were steady to firm as PSF market was stable during the month. In Shengze, offers for 32s polyester yarn were at US$1.67-1.69 a kg, down US cents 3 from April.In India, 30 polyester knit yarns were at US$1.95 a kg, down US cents 2 in Ludhiana market. In Pakistan, 30s spun polyester was at US$2.59 a kg, down US cents 2 on the month.Viscose spun yarn markets were weak in China amid modest liquidity.In Pakistan, viscose yarn prices edged down as VSF prices declined with import offers from China dropping and domestic prices losing more than yarn price reduction. In India, viscose yarn prices were much more stable, given the stability in VSF cost.In Xiaoshan, 30s spun viscose were at US$2.78 a kg, down US cents 12on the month. In India, 30s viscose prices were at US$2.77 a kg, up US cent1 in Indore market. In Pakistan, 35s viscose yarn were down US cents 6at US$2.92 a kg in Karachi.

Blended yarn prices in May rolled over in China’s domestic market, as activity was reduced by a holiday shortened month. On the import market too, prices were relatively stable, due to slightly dropping in US$ terms whereas rising in yuan terms. In Pakistan, PC yarns prices have been stable on the month and in last three months, irrespective of changes in PSF prices in the meantime. This clearly shows sign that margins of PC yarn producers were in positive zone. In India, PC and PV yarn prices also rolled over both but exporters were reportedly struggling at these price levels on the international market.In India, PC 30s (52/48) were at US$2.66 a kg in Ludhiana market, down US cent 1 from previous month while PV 30s (65/35) were at US$2.28 a kg, down US cents 2 from last month. In Pakistan, PC 30s fell US cents 3 at US$2.69 a kg on the Faisalabad market. In Qianqing market, polyester-cotton 32s (65/35) were traded at US$2.50 a kg, down US cent 1 while 45s (65/35) yarn were at US$3.38 a kg, up US cent 1 on the month.