Yizheng Chemical Fibre is likely to lose money for the full year as increases in polyester prices will not be sufficient to wipe out its first-half losses. Managing director Ma Yuping said polyester prices had risen 5 per cent this month since Beijing launched an anti-smuggling drive last month. 'It is not a technical rebound. We expect the price will remain stable and may rise again, although it will not be a significant increase,' he said. Yizheng - the world's fourth-largest polyester-maker - made a net loss of 183.56 million yuan (about HK$170.8 million) for the first six months, underscoring the difficulties facing the mainland chemical sector which was savaged by an influx of cheaper imports from regional rivals. Deputy general manager Wang Shilin said the interim loss would be cut significantly in the second half due to the price rises, but the firm might not be able to cover the loss. Salomon Smith Barney analyst Janet Yang expected Yizheng to make a full-year loss of 545 million yuan. She said export demand for textiles would remain weak if Beijing did not devalue the yuan. 'We think the company will only benefit if there is a devaluation of yuan, increasing export demand for textiles and curbing import dumping from neighbouring countries,' Ms Yang said. In the first half, Yizheng's wholly owned offshoot - Foshan Chemical Fibre Joint Corp - saw its loss swell to 60 million yuan. Mr Wang said some of the Foshan plant's facilities which made serious losses were shut down, but Yizheng had no plan to close the factory. Yizheng acquired the Foshan plant in 1995. After making about one million yuan in profit that year, the Foshan subsidiary lost more than 100 million yuan in 1996 and 70 million yuan last year. As of June 30, Yizheng had placed 371.36 million yuan as savings and fixed deposits and 279.15 million yuan as designated deposits with China Yizheng Chemical Group Finance Co, wholly owned by Yizheng's parent company Yihua Group Corp. The money was then lent to Yihua's other subsidiaries. Yizheng has outstanding foreign debts of US$60 million - a third in long-term loans and about four billion yuan of domestic loans and less than 600 million yuan in long-term debt.