Price trend:

According to the business data analysis system of SunSirs, on December 22nd, the domestic price of polyester staple fiber increased significantly. The average market price of polyester staple fiber (1.4D*38mm) was 6,370 RMB/ton, an increase of 1.19% compared to the previous trading day.

Market Analysis

Geopolitical conflicts between Russia and Ukraine, and the US and Venezuela, boosted oil prices in the short term. On December 19th, international crude oil futures closed higher. The settlement price for the February contract of US WTI crude oil futures was $56.52 per barrel, an increase of $0.52 or 0.9%. The settlement price for the February contract of Brent crude oil futures was $60.47 per barrel, an increase of $0.65 or 1.1%. There were no significant changes in PX (paraxylene) production recently, and a slight inventory build-up is expected in December. However, due to tight spot market liquidity and low inventory levels, PX prices are expected to remain supported.

As of the close of trading on December 22nd, the PTA 2605 contract closed at 5,040 RMB/ton, an increase of 218 RMB/ton compared to the previous day's settlement price. The spot market also continued its strong performance. According to SunSirs' commodity market analysis system, the spot price of PTA in East China on the 22nd was 4,879 RMB/ton, a 3.04% increase from the previous trading day. In terms of supply, the operating rate of the domestic PTA industry was around 73%.  Due to low processing margins, factories' production enthusiasm was limited, and there is a possibility of increased unplanned maintenance, resulting in limited supply recovery.

Downstream yarn factories were generally hesitant to accept price increases for raw materials, showing a strong wait-and-see attitude. Market transactions were mainly driven by essential needs, with most suppliers maintaining stable prices. Some yarn factories reported insufficient orders and increasing sales pressure. Due to the impact of the off-season for consumption, demand had weakened, leading to inventory accumulation in both weaving and knitting sectors.

Market Forecast:

According to analysts at SunSirs, in the crude oil market, a peace agreement between Russia and Ukraine is unlikely in the short term, increasing geopolitical risks. Furthermore, the peak demand season for oil during the Christmas period in Europe and the US, coupled with improved demand in some regions, is supporting oil prices. The continuous destocking of PTA, combined with low processing fees, maintains a strong upward trend, thus supporting the price of staple fibers. However, the end market remains sluggish, and there is little enthusiasm for chasing higher prices, leading to generally low purchasing activity from yarn manufacturers, which acts as a drag on staple fiber prices.

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