PTA, MEG Price Volatility Pressures Polyester Value Chain
Rising prices of key polyester raw materials have begun to impact downstream textile manufacturers, as volatility in global crude oil markets continues to influence the synthetic fibre value chain.
Prices of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG), two major inputs used in the production of synthetic fibres, filaments and yarn, rose by about Rs 20.48 per kg on March 10 before easing by around Rs 14 per kg on March 11. Despite the partial correction, the recent price spike has created pressure across downstream segments dependent on these inputs.
Industry sources indicate that the recent volatility in the polyester value chain is largely linked to fluctuations in crude oil prices triggered by geopolitical developments. Over the past two weeks, raw material prices have increased by roughly Rs 23 per kg, rising from about Rs 80 per kg to nearly Rs 103 per kg. However, market participants consider the increase largely temporary and linked to geopolitical uncertainty rather than a structural shift in costs.
Supply chain disruptions have also contributed to the price movements. MEG, which is partly sourced from West Asia, has been affected by shipment disruptions from the region. At the same time, domestic suppliers have been prioritising internal consumption, which has tightened spot availability in the market.
India also imports PTA and MEG from China, and logistical challenges in international shipments have further increased dependence on domestic supplies. The sudden rise in raw material prices is placing additional pressure on the downstream textile value chain, including manufacturers of man-made fibres, polyester yarn and related products.
Global crude oil prices have also been volatile, rising to around US$ 118 per barrel on March 9 before dropping to about US$ 92 per barrel. Despite this fluctuation, producers of PTA and MEG increased prices, which has had a cascading effect across the polyester value chain.
Manufacturers of man-made fibres and PET increased prices by about Rs 20 per kg from March 10, while synthetic filament producers raised prices by approximately Rs 6 per kg. The rise in raw material costs is gradually being reflected across the man-made fibre segment, adding to cost pressures for textile manufacturers.
