The months-long slide in man-made fiber prices might soon be coming to an end.
Global synthetic fiber prices fell by 12.3% in May compared to the same month last year. Although this represents the twentieth consecutive month of year-over-year declines, it is the smallest drop in six months, according to recent data from consulting firm PCI Fibres.
Firmer crude oil prices have helped to offset the downward pressure inflicted by cost-conscious apparel makers. After rising 30 percent between mid-March and early May, oil prices have been moving within a very narrow band between $59 and $60, though remain 30 percent lower than a year ago.
In Asia, the world’s largest fiber-producing region, synthetic fiber prices fell by only 6.6%, a much smaller decline than April’s almost 12 percent drop.
In China, staple prices have firmed, while those of polyester have declined due to a recent drop in intermediates prices and sluggish demand for the fiber due to seasonality. However, polyester is beginning to replace cotton in many fabrications due to its lower cost, so demand for the synthetic fiber is getting stronger.
After rising in April, nylon 6 prices stabilized in May. Nylon 6,6 reportedly remains in tight supply globally. Spandex prices are at historically low levels, having fallen slowly over the past two months, impacted by new capacity that has come on stream at the same time that market demand is softening somewhat.
Asian synthetic fiber prices are more than 17 percent below the world average.
The European synthetic fiber price index fell by 24 percent compared to May 2014. European synthetic prices ended the month at more than 10 percent above the world average.
The U.S. index fell by almost 13 percent in May. Inventories are low and demand is stable, resulting in a high sales-to-capacity level that is keeping U.S. prices 48 percent above the global average. In April, Invista declared force majeure, or supply limits, on some nylon 6,6 feedstocks due to a “chemical functioning” problem at its plant in Victoria, Texas. Production has since returned to normal, however.
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