Polyester staple fibers continued astonishingly falling last week in China as a result of lower demand from downward processors, although the gap with cotton prices further increased. Raw material prices could slightly rebound in the short term after oil prices unexpectedly surged.

With cotton prices still at a very high level, demand for polyester staple fibers was expected surging in China as spinners increasingly replace cotton by less expensive polyester.

As shown by our table below, the price difference between cotton and polyester progressively rose from 4,478 yuan per ton (51 US cents per kilo) by the end of September up to 7,431 yuan per ton (90 cents) by the end of last week.

As a result of the surge in cotton prices, PSF prices began also sharply increasing in the first three weeks of October, from below the 10,000-yuan level (US$1.21 per kilo) up to 12,050 yuan per ton (US$1.46 per kilo) on October 20th.

Far from further rising as expected by traders and experts, prices of polyester staple fibers declined in the past three weeks, finally reaching an average level of about 10,350 yuan per ton (US$1.25) in the past week.