Synthetic Fibers to Cost More

Prices for synthetic fibers will probably keep rising due to a supply shortage while other chemical products will become cheaper in the fourth quarter, the National Development and Reform Commission said yesterday.

Cotton output is expected to reach 5.7 million tons in the country this year and the demand is about 9.4 million tons, the top economic planning body said. That will spur demand for products like chemical fibers used as a substitute for cotton.

However, most other chemical products prices will drop moderately in the last quarter, the planner said. It cited cheaper energy and raw material prices, excessive production capacity of some products, as well as a drop in crude rates on global markets.

Output of ethylene increased 33.5 percent in August while production of plastic resin rose 28.8 percent, both faster than the previous month, the commission said.

"Over production will dampen the market balance and then cause pressure on enterprises," it said. Chemical products provide higher profit margins compared to refining oil.

Shanghai Daily