Mumbai, Sept. 7: China is playing a vital role in the man-made fibre industry. The country, which is a net importer of partially oriented yarn (POY), polyester staple fibre (PSF) and other fibre intermediates, is playing a critical role in sustaining an upward momentum in their prices. This comes at a time when domestic demand for these products is buoyant with the festive season around the corner.
While both POY and PSF are important raw materials for fabrics, domestic producers of polyester fibre and yarn led by Reliance Industries Ltd and Indo Rama Synthetics (India) Ltd are happy at the developments.
Both these companies have been successful in pushing through three consecutive price hikes 2003-04 and experts expect this trend to continue in the coming months.
“China imports 30 per cent of its POY and PSF requirements,” sources affirmed. They added that China has been a continuous buyer since it has emerged successfully out of the Severe Acute Respiratory Syndrome (Sars) virus shadow.
The huge potential has prompted Indo Rama to eye the Chinese market for export of many commodities, including spun yarn.
Though firm global crude prices have ensured prices of key raw materials rising in tandem, a positive development now is better demand from the user industry. This factor had enabled polyester makers to successfully pass on any rise in raw material prices, sources said.
Deputy general manager of Indo Rama Synthetics Raj Verma said, “The downstream industry here is also playing a vital role. The weaving rates have gone up and they are consuming more of POY and other yarn. The demand supply situation is fairly balanced here so the price increases should sustain.”