SunSirs: PTA Declines First and then Rises, China's Polyester Staple Fiber Spot is Strong

1. Price Trend

According to SunSirs price monitoring, last week (12.18-12.25), the domestic polyester staple fiber spot price trend was firm. As of December 25, the domestic polyester staple fiber spot market average price was 5918 yuan/ton, down 17.43% year-on-year. Many manufacturers have slightly raised their quotations. In the futures market, the main staple fiber futures (2105) on December 25 closed down and closed at 6304. Crude oil and PTA futures rallied first and then drove a shock rebound in polyester staple fiber futures. The rebound in raw materials and futures drove a strong polyester staple fiber spot price. However, the downstream emission reductions, reduced production and electricity curtailment, the spot production and sales of polyester staple fiber fell. Affected by demand constraints, polyester staple fiber spot may not continue to strengthen.

2. Factors affecting prices

1) PTA: The domestic PTA spot market dropped slightly last week. Last weekend, the average domestic PTA spot market price was 3630 yuan/ton, down 0.68% from the beginning of the week and 25.87% year-on-year. After the rise of new crown vaccines and the news of OPEC's production cuts, it fell back last week due to repeated blows from the new crown epidemic. The cost of crude oil fell, and the price of PTA stabilized after falling.

2) Ethylene glycol: The domestic ethylene glycol spot market rose last week. Last weekend, the average ex-factory price of oil-based ethylene glycol in North China was 4,050 yuan/ton, down 22.85% year-on-year. Macro market preference, port inventory decline, emission reductions and power cuts in many places, and ethylene glycol prices rebounded. However, the downstream chemical fiber weaving market has gradually entered the off-season, production and sales have fallen, ethylene glycol may reappear in stocks, and downward pressure on the market will increase.

3) Polyester yarn: The domestic polyester yarn market operated smoothly last week. Last weekend, the average spot market price of 32S polyester yarn in Jiangsu, Zhejiang and Shanghai was around 13,375 yuan/ton, down 7.25% year-on-year. The domestic textile market is showing signs of recovery. The number of new orders from textile companies has increased. Yarn prices in some regions have generally increased slightly. The sales of mid- and low-end yarns are relatively good, while the high-end textile apparel market is still poor. Market performance varies among different varieties. Still big, the price of pure polyester yarn market is stable, but the focus of negotiation is slightly floating.

3. Outlook

SunSirs analysts believe that crude oil and PTA have fluctuated up since the beginning of November, but prices fell last week due to repeated public health events, which weakened the cost support of polyester staple fiber. The downstream weaving market has entered the traditional off-season, the number of new orders has decreased, the sales of winter fabrics have declined compared with the previous month, the orders for spring fabrics have been relatively limited, the operating rate of weaving companies has been partially insufficient, and polyester yarn mills have entered the stockpile. The short-term follow-up purchasing enthusiasm may weaken, and the wait-and-see sentiment may increase after the stock level of staple fiber spot production and sales has been hot in the early stage. It is expected that the staple fiber spot market will enter the stage of accumulation. However, the current crude oil and PTA futures are still showing strong fluctuations, and cost support still exists. Short-term staple fiber futures may continue to fluctuate strongly.

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