SunSirs: Cost Boost, China's Polyester Filament Market Ends Perfectly in December 2020

According to SunSirs price monitoring, the domestic polyester filament market price rebounded significantly in December. Among them, polyester POY rose the most. As of December 31, it rose 15.83% from the beginning of the month, followed by polyester DTY and polyester FDY, with increases of 11.23% and 11.18%, respectively. 

The current overall polyester market inventory is concentrated in 15-31 days, of which POY inventory is 4-10 days, FDY inventory is around 10-28 days, and DTY inventory is around 17-31 days. In terms of price, mainstream factories in Jiangsu and Zhejiang provinces offer polyester POY (150D/48F) at 5850-6100 yuan/ton, polyester FDY (150D/96F) at 5850-6250 yuan/ton, and polyester DTY (150D/48F low elastic) at 7400-7800. Yuan / ton.

In the raw material market, OPEC+ finally decided to slow down its crude oil production increase plan. At the same time, many countries in Europe and the United States have successively launched new crown vaccination to boost market sentiment. The continuous rise of international oil prices has clearly boosted PTA. However, due to the repeated epidemics and the increase in the number of online drilling wells, the 50 mark above the main WTI crude oil was blocked. As of December 30, the closing price of international crude oil WTI was US$48.40/barrel, and the closing price of BRENT was US$51.34/barrel.

The PTA market fluctuated upward under the boost of crude oil. As of December 31, the average domestic PTA spot market price was 3628 yuan/ton, up 9.63% from the beginning of the month and down 27.11% year-on-year. In December, there were few PTA maintenance. In the first half of the month, Reignwood Petrochemical 1.4 million tons of short-term maintenance, Zhuhai BP 1.1 million tons of planned maintenance from December 13 to the end of December, the PTA industry operating rate remained at about 90%, so the supply continued to be at a high level. In the second half of the month, with Fuhai Chuangxin's 4.5 million tons and Chuanneng Chemical's 1 million tons of maintenance, the PTA industry operating rate fell to around 83% as of December 29. Inventory pressure remains. As of December 18, the domestic PTA social inventory was 4.334 million tons, a substantial increase of 3.056 million tons over the same period in 2019.

In the textile terminal market, boosted by the mentality of 'buying up and not buying down' by raw materials, the increase in the downstream replenishment of terminals is gradually being released, especially the increase in raw material stocking in terminal factories in Jiangsu and Zhejiang. In addition, as the temperature drops, the market has ushered in a wave of purchases. The autumn and winter apparel fabrics market is better, and the trading atmosphere is obviously heating up. At the same time, as the end of the year is approaching, downstream customers still have rigid demand for fabrics, and orders for delivery years ago are also placed one after another.

On the whole, the main reason to promote this round of market is the continuous upward trend of international oil prices, and the price of polyester filament yarn has also been ‘activated’, but can this round of market be sustained? SunSirs analysts believe that, first of all, the cost-side PTA supply is still at a high level, inventory pressure remains, and new production capacity is expected to be launched soon, which will drag PTA, but crude oil fluctuates near a 10-month high and still supports the market mentality. Secondly, the downstream textile market currently has orders on hand and still replenishes raw materials. As for exports, it is expected that with the deepening of winter, influenza will occur frequently, and the epidemic will repeat. The export of protective textiles will also maintain growth, and it is expected to drive the overall textile and apparel to continue to increase it is good. Finally, from the historical price cycle analysis, polyester filament is at a low price and low inventory. Once the demand recovers, the market is expected to rebound. According to a survey of mainstream polyester filament factories by SunSirs, everyone is still looking forward to the market in January 2020, especially the first half of the month. Therefore, in summary, under the favorable atmosphere of polyester filament yarn, short-term prices will still fluctuate mainly upward.

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