Though 1998 was quite depressed for the textile industry in general, global mill consumption of polyester textile filament rose to 8.0 million tonnes from 7.4 million tonnes in the earlier year. This provides a strong foundation for further growth as Asian economies move into a recovery phase and consuming markets in North America, West Europe and Japan begin to look more promising. The PCI is looking for global growth to 15.5 million tonnes in 2005 and 18 million tonnes by 2010.

The PCI notes that there was a period of significant profit for the industry in Asia and Far East in the early 1990s when costs were lower than the prices realised.

Even during the rawmaterial price upswing in 1995, polyester yarn manufacturers remained profitable. However there was real cost price squeeze in the late 1998 and early 1999. The PCI sees the recovery setting in during the second quarter of 1999, but much still depends on East Asia's restraint in the deployment of existing capacity.

In West Europe, 1980s and early 1990s was a period of profit, but the situation turned unfavourable in 1993 because of recession. After hesitant recovery in 1994, there was a period of loss in 1998 and 1999 and very limited recovery in the late 1999.

Western Europe is still working through existing yarn and fabric stocks and is struggling to recover from the shock of an ultra-competitive Asia pricing assault at all stages in the textile chain.

Even in W Europe, however, prices are expected to rise gently during the third and fourth quarters of 1999, although this may not be adequate to restore necessary margin for local manufacturers in mainstream products. In broad terms, W.Europeanpolyester filament suppliers are turning increasingly to more specialised yarn types in an effort to improve margins above the limited levels.

In North America, the structure of the market is more stable for a variety of reasons. However the impact of Asian competition at all stages and in the textile chain had impacted by the second half of 1998. In line with other regions, some recovery is seen here also, substantially led by volumes and also with some price improvement.

However one should not overstate the good news for the global polyester market, since there remains a very significant capacity overhang. Despite a strong recovery in prices in the second quarter of 1999, there has been a small fall- off in prices and confidence in the third quarter.

This underlines the need for continued discipline in the deployment of current and new capacity which must be matched against the steady growth in global demand, if price recovery is to move steadily ahead.

The PCI's own expectation is that polyesterprices will resume the upward trend in the last quarter of 1999, driven by continued raw material pressures and slow rise in capacity utilisation.

``But we still face a patient 6-9 months, if the polyester industry is to emerge without further casualties from the difficulties of the last 12-18 months. Thereafter a more buoyant future beckons for polyester.''

About polyester staple fibre, the PCI feels that its broad pattern is similar to that of polyester filament. It has, according to the PCI, recorded growth from 7.0 million tonnes in 1997 to 7.2 million tonnes in 1998, with a long- term expansion at a rate of five per cent per year.

However despite its strong growth in absolute terms, polyester staple is being overtaken by polyester filament as that becomes steadily more versatile. Despite this, it is hoped that the polyester staple industry will grow to 10.5 million tonnes by 2005 and to nearly 13.0 million tonnes by 2010.

In the shorter- term, the PCI visualises a pricing pattern similar topolyester filament - the dramatic recovery from the suicidal prices of the first quarter of 1999, the hesitancy arising from continued excess capacity. However, as with polyester filament, global demand should fairly quickly eat into this surplus so that by mid-2000, the global polyester economy will once again be moving strongly ahead,''says the PCI.