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SunSirs: Demand Side will Weaken, Prices of Polyester FDY are at Risk of Falling

December 23 2019 12:36:42     SunSirs (Linda)

According to the price monitoring of SunSirs, the domestic Polyester FDY market continues to show a slight upward trend this week. The polyester POY(150D/48F) of mainstream factories in Jiangsu and Zhejiang is 6,900-7,200RMB/ton, the polyester FDY (150D/96F) is 7,350-7,750RMB/ton, and the polyester DTY (150D/48F) is 8,600-8,950RMB/ton.

Average market price of Polyester FDY this week, unit: RMB/ton

Product

Dec 16

Dec 20

Weekly

Year on year

Polyester POY (150D/48F)

7,044

7,084

0.57%

-18.95%

Polyester FDY (150D/96F)

7,390

7,506

1.58%

-20.82%

Polyester DTY(150D/48F low elasticity)

8,676

8,807

1.51%

-16.31%

This week, the spot market price of raw materials PTA fell slightly, 4,890RMB/ton as of December 20, down 0.54% from the beginning of the week, down 26.23% year on year. The international oil price continued to rise, and the PTA market was driven by the warmer cost side and macro sentiment. In the week, Hengli petrochemical and Zhongtai Petrochemical successively announced the delayed production of new devices, which to some extent eased the market's pessimistic expectation on PTA supply side. However, due to the restart of Hanbang petrochemical plant, PTA once again entered the accumulation period, while polyester gradually entered the stage of production reduction, the demand side further weakened, leading to the weakening of prices.

Changes in domestic mainstream PTA plants

Enterprwase Name

Device Capacity

Device’s Recent Change

Hailun Petrochemicals

120

Overhaul in late December

Zhongtai Petrochemical

120

Postpone production to around December 25-26

Hengli petrochemical

250

Postpone production to the first ten days of January, the original plan is to start production before the end of December, and the time is to be determined

Hanbang Petrochemical

220

Heat up on 18th, planned to product on 19th

On the demand side, since December, the downstream market has entered into a traditional off-season. The demand for grey cloth and fabric is relatively weak. The manufacturers insist on buying as they use the raw materials. The stock is generally high, and the capital is even more tight. The comprehensive start-up rate of Jiangsu and Zhejiang looms has declined month on month. Most of the overall orders of weaving enterprises are dominated by "small batch, multi batch", and most of them keep stable start-up. At present, the comprehensive start-up rate of Jiangsu and Zhejiang looms has been maintained around 70%, and the follow-up of market orders is insufficient. The end factory's autumn and winter clothing fabric orders are basically coming to an end, and the delivery is not smooth.

An analyst of SunSirs believes that the current favorable crude oil production reduction and polyester production reduction are gradually increasing, which supports the price of polyester filament. However, PTA's new capacity is expected to be put into production, and the pressure on the supply side is weak. At the same time, from the perspective of the terminal market, the Spring Festival holiday in 2020 is ahead of schedule, and downstream manufacturers have begun to lay out holiday plans, so the market atmosphere will be further lowered, and pessimism will continue to pervade. It is expected that the market price of polyester filament will be weakened next week.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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