SunSirs: Cost Boost, China's Polyester Market Ushered in A 'Good Start'

According to SunSirs price monitoring, the domestic polyester filament market price has continued the upward trend at the end of 2020, and the recent surge in international oil prices has made the market ushered in a "good start" after the Spring Festival. For factories, the average daily price increase was 100 yuan, and some even increased by more than 300 yuan, and there was a hot scene of second price adjustment in a single day. As of February 24, the POY150D/48F market in Jiangsu and Zhejiang regions refers to 7500-7750 yuan/ton, FDY150D/96F refers to 7500-7700 yuan/ton, and DTY150D/48F refers to 9000-9200 yuan/ton.

In terms of production and sales, the average production and sales of mainstream factories in Jiangsu and Zhejiang are 130%-150%, and the production and sales of some hot factories can reach 300%. The overall polyester inventory is concentrated in 19-26 days, POY inventory is 7-9 days, FDY inventory is 12-22 days, and DTY inventory is about 13-26 days. From the perspective of the average price of each product, polyester FDY has the most significant increase. As of February 24, it has increased by 16.09% compared to the first month of February 18 (the seventh day), followed by polyester POY and polyester DTY, which have increased by 15.95% and 11.31% respectively. 

Crude oil continues to rebound, cost support increases

Affected by the recent cold wave, U.S. crude oil production has decreased, coupled with the increase in oil prices expected by many institutions to boost market confidence, crude oil rebounded strongly, and crude oil hit a new high in the past 13 months. Driven by crude oil, the PTA market has followed the rise. As of February 24, the average spot market price was 4,615 yuan/ton, an increase of 13.14% from February 18 and an increase of 4.32% year-on-year. At present, the PTA spot processing difference has been reduced to less than 200 yuan/ton. Some PTA devices are planned to be overhauled under low processing fees. The overall supply is lower than market expectations. Among them, the 2 million tons of PTA devices in Yisheng Hainan will be overhauled on February 11, 2021. It is estimated to park for about 1 month. A 400,000-ton PTA device in Shanghai was unexpectedly shut down, and the restart time was to be determined. The overall load of the domestic PTA device dropped to around 86%.

Downstream factories resume work orderly, purchase cautiously

The orderly resumption of work in the terminal market after the holiday has made the resumption time earlier than scheduled. As of February 24, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang has increased to more than 48%. It is expected that the weaving industry will basically resume normal operation in early March. However, at this stage, raw materials are rising rapidly, and the rapid increase has increased market risks. Therefore, the downstream is cautiously watching the market and inquiring more prices, but "orders" are still hesitant, and orders have not yet seen a significant improvement. Since the opening of the traditional trading zone in China Textile City on the morning of February 19, until February 23, the spring fabrics include knitted printed T-shirt fabrics, knitted jacquard fabrics, knitted embroidered fabrics, knitted burnt-out fabrics, and knitted water melt fabrics. The bulk of multiple varieties are mainly for scattered purchase. However, it will take time for most of the northern and southern merchants across the country to return to the market. The traditional market in China Textile City will maintain a normal operating rate until February 26 (the 15th day of the first lunar month) after the Lantern Festival.

Looking at the market outlook, from the survey of SunSirs, most companies still have expectations for the market in March, and the majority continue to be bullish. Business analyst Xia Ting believes that there is still a certain amount of support on the current cost side, and crude oil prices will remain high and fluctuate in the short-term, with strong assists. Later, we need to pay attention to the OPEC+ meeting on March 4. From the perspective of PTA, the current PTA processing difference has been reduced to a low level. In March-April, the domestic PTA equipment maintenance capacity was close to 9 million tons, and attention was paid to the implementation of later maintenance and the commissioning of new equipment. In the downstream market, grey fabrics were sold at a loss before the holiday, and the overall inventory pressure was not great. Recently, grey fabrics have followed the rising trend of polyester, and the quotations have been raised one after another. It is heard that some traders are also closing in large quantities, and the stock of grey fabrics after the holiday shows a downward trend. Based on the above, it is expected that in the short term, the price of polyester filament may be subject to fluctuations in raw materials, and there will be a certain adjustment range, but the overall decline is unlikely. After mid-March, as terminal demand gradually becomes clear, and due to the excessive rise, the demand will be suppressed. It is expected that the negotiations will be deadlocked in mid-March, and there is a risk of weakness.

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