Speaking to The Financial Express, DCL Polyesters vice-president V Sambasiva Rao said that the selling prices of partially-oriented yarn (POY) have started firming up from February 1999 in the international markets, which has been reflected in the domestic market. This will enable the company to break even in the first quarter itself.

Yarn selling prices are ruling at $1.25 per kg, against the previous year's $0.65 per kg. Owing to the short supply of monoethylene glycol in the domestic market, prices have increased to Rs 26 a kg from Rs 22 a kg. POY prices went up to Rs 62 per kg from last year's Rs 54 per kg, Rao said.

According to him, prices of petrochemical products likenaphtha and paracylene have also gone up sharply in the international markets due to, among other things, the crisis in the Asia Pacific region and lower inventories. With the continuous demand, the prices are set to increase further from July onwards.

Rao expects a further rise in yarn prices by Rs 5 per kg during this week, pushing the domestic price to Rs 70. This will still help the domestic to compete with international prices, which are set to touch Rs 80. With demand for cloth and fabric set to go up from July onwards due to festive season buying, the demand for PFY also will increase, he added.

The company posted a net loss of Rs 2.93 crore in 1996-97, rose to Rs 9.94 crore in 1997-98, and shot up to Rs 32 crore in 1998-99. The reasons for the losses were overcapacity in the first year, depressed market condition in petrochemical products in the second year, and sluggish growth during the last fiscal, with a Rs 12 per kg crash in selling prices, Rao said.