Polyester Market Summary (Jan 28-Feb 15,2011)

● PTA was in deadlock during the Spring Festival, but the market moved up rapidly after the holidays driving by bullish PTA futures market and firmer downstream polyester market. However, end-user demand has not followed up. MEG market opened with strong note as the commodity market surged with several commodities hitting record highs. After rushing up firmly, some suppliers with profits began to sell cargos to get cash. But as several units will be shut for maintenance, the market is affected obviously. The feedstock market may keep consolidating in short time to wait for downstream demand recovering.

● In H1 Feb, PET fiber chip market strengthened somewhat following the rise of feedstock and other relevant products. However, fiber chip plants were likely to suffer losses as feedstock climbed too fast.

● After a lull during Spring Festival, PFY market welcomed a good opening and major producers widely lifted offers up 300-500yuan/mt. But the sharp increase of raw materials quickly swallowed PFY profits and some descriptions faced losses. While downstream market took a slow recovering pace, influenced by labor issue on some extent. Caught in a dilemma, PFY market started a correction period then and some plants started to revised prices down slightly or provided discounts.

● Direct-spun PSF offer generally climbed up by 1000yuan/mt after spring festival but its sales stayed slim. PSF O/R gradually enhanced after holiday and its inventory increased little.

● After the holiday, PET bottle chip prices began to climb following strong feedstock. Export market moved up quickly supported by rising prices and good demand in major PET consumption regions, with prices up $70-80/mt. In comparison, the rise in domestic market was slower as both sides were cautious.