According to the commodity market analysis system of SunSirs, the domestic polyester staple fiber market showed an "inverted V" trend in May. As of May 29, the average market price of domestic polyester staple fiber (1.4D*38mm) was 6,522 RMB/ton, up 2.69% from the beginning of the month. The cost increase in the first half of the month drove the price of polyester staple fiber more, but in the second half of the month, as the support of raw materials weakened and demand stalemate, the price of polyester staple fiber weakened. Looking at the market outlook:

The current settlement price of the main contract of WTI crude oil futures in the United States is US$61.84/barrel, and the settlement price of the main contract of Brent crude oil futures is US$64.32/barrel. Trump postponed the imposition of tariffs on the European Union, but OPEC and its allies are considering another substantial increase in production. Therefore, the oil market is weighing the prospects of easing trade tensions and increasing supply from OPEC+ in the short term.

Recently, with the recovery of PX benefits, some domestic and foreign units have increased their loads and restarted their previous maintenance units. For example, the 1.6 million tons of Zhongjin Petrochemical and the 4 million tons of Zhejiang Petrochemical units have been restarted ahead of schedule, which has gradually increased the supply of PX. Combined with the gradual realization of the production cuts in the downstream polyester link, the marginal weakening of the supply and demand side, and the limited support of crude oil prices, PX is under obvious upward pressure. However, with the gradual increase in the downstream PTA load, the short-term PX supply and demand side is good, and the current spot market supply is tight, PX is still relatively resistant to declines.

In May, PTA units were concentratedly overhauled, and PTA units were restarted in the second half of the month. As of the end of the month, the operating rate of the PTA industry was around 78%. In terms of price, the domestic PTA spot market in May showed a trend of rising first and then falling. As of May 29, the average price of PTA in the East China market was 4,972 RMB/ton, up 8.47% from the beginning of the month. With the repair of the disk processing fee, the implementation of the unit maintenance in June and July may be less than expected. New production capacity such as Honggang Petrochemical Phase III and Hailun Petrochemical Phase III will be put into production in June-August, and the forward supply is mainly loose.

Under the sharp rise in raw materials, downstream yarn mills have expanded losses, pure polyester yarn processing fees continue to be under pressure, and the recovery power is insufficient. In addition, with China's export rush to the United States expected to gradually end in late June and the domestic sales off-season approaching, the operation of looms in Jiangsu and Zhejiang is around 70%, the atmosphere of grey cloth orders has fallen again, and cloth prices are difficult to raise. The terminal mainly digests raw material inventory after stocking up at a low level, and cautiously waits and sees just-needed purchases.

On the whole, analysts from SunSirs believe that crude oil prices are dominated by geopolitical risks and policy games, and emergencies may lead to increased volatility in oil prices. The increase in supply brought about by the release of new PTA production capacity and the restart of maintenance equipment will suppress the upward space of PTA prices. Support on the cost side will be weakened. On the demand side, both domestic and foreign trade orders at the terminal are weak. After the Dragon Boat Festival, downstream expectations for the future market are pessimistic, and the enthusiasm for receiving goods is not high, so the pressure on short fiber factories to destock has increased.

In the short term, staple fiber prices are expected to fluctuate along with crude oil prices, and there is still an overall downside risk.

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