PTA, MEG prices rise on U.S.-Israel-Iran war

The price of Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG), raw materials used in to make synthetic fibres, filament and yarn, rose by ₹20.48/kg on March 10. It reduced by ₹14 a kg on Wednesday. However, the sudden spike in prices is affecting the downstream industries that make products based on PTA and MEG.

Madhu Sudhan Bhageria, Chairman and Managing Director of Filatex India, said the war has led to short-term volatility in the polyester value chain, mainly through fluctuations in crude oil prices. Since polyester is a petrochemical-based product, movements in crude oil tend to influence raw material costs across the industry.

Over the past two weeks, raw material prices have increased by around ₹23 per kg, moving from approximately ₹80 a kg to about ₹103 a kg. “However, industry key players view this largely as a temporary movement linked to geopolitical uncertainty rather than a structural shift in costs.”

There have also been some adjustments in the supply chain. One of the key raw materials, MEG, is partly sourced from West Asia and shipments from the region are experiencing disruptions. Domestically, suppliers are prioritising internal consumption, which has tightened spot availability in the market, he said.

Durai Palanisamy, chairman of the Southern India Mills Association, said apart from local supplies, PTA and MEG are imported from West Asia and China too. With logistic disruptions, the domestic players have to depend on the local supplies. “We do not know how much of price hike the market can absorb,” he said.

RK Vij, president of the Textile Association of India, said the sudden increase of PTA and MEG (Melt) prices was a huge burden on the downstream textile value chain.

Oil prices shot up to $ 118 a barrel on March 9 and dropped to $92 a barrel. Yet the producers of PTA and MEG hiked the prices. Similarly, producers of manmade fibre and PET increased the prices by ₹20 a kg from March 10. The manufacturers of synthetic filaments increased the prices by ₹6 a kg.

Mr. Bhageria added that the rise in raw material costs has begun to reflect gradually across the manmade fibre value chain, including polyester yarn and related products.