PTA-MEG Price Drop May Bring Rs.4/kg Relief in Polyester Yarn

SURAT: A sharp fall in the international price of MEG, coupled with a decline in PTA, has raised expectations of cheaper polyester yarn for Surat’s textile industry. Industry sources estimate that the latest movement in key raw-material prices could translate into a ₹4-per-kg reduction in polyester yarn prices, offering some relief to weavers and downstream manufacturers.

According to CFR China market data for August 27, PTA was quoted at $800 per tonne, while MEG stood at $688 per tonne.

The movement in MEG has been particularly significant. On August 26, MEG fell $52 in a single day to $698 per tonne. It dropped another $10 on August 27, taking the total two-day decline to $62 per tonne.

PTA, meanwhile, declined by $25 on August 26 to $800 per tonne and remained at the same level the following day.

PTA and MEG are the principal raw materials used to manufacture polyester. Their international prices have a significant bearing on production costs and, ultimately, yarn prices.

Surat textile industry sources said the fall in raw-material costs should now be reflected in polyester yarn prices.

“The decline in PTA and MEG prices should provide room for a reduction of around ₹4 per kg in polyester yarn prices,” industry sources said.

However, the actual reduction will depend on several other factors, including the dollar-rupee exchange rate, crude oil prices, freight charges, electricity and gas costs, manufacturing expenses and domestic demand.

The development is important for Surat, one of India’s major man-made fibre textile hubs. Changes in polyester raw-material prices can move through the entire textile chain, from yarn and weaving to fabric processing and garment manufacturing.

With textile demand facing pressure, lower yarn prices could help reduce input costs for weavers and other downstream units.

Industrialists said the benefit of cheaper raw materials should ultimately reach the wider textile value chain.

“When raw-material prices fall, the entire chain from yarn to grey fabric and processing should benefit,” industry representatives said.

The Surat textile market is now closely watching international PTA and MEG prices. If the downward trend continues, manufacturers and weavers could see further cost relief in the coming days.