The staple fiber market is unlikely to break out of the volatile pattern in the short term. On the one hand, the situation of loose supply and off-season demand continues. On the other hand, the support from the cost side is limited, so the market is waiting for new driving factors. The strength and rhythm of the recovery in end demand after the Spring Festival will be the key to breaking the current balance and leading the direction.
Since the price of the main staple fiber contract hit a periodic high on December 26, 2025, the market has entered a volatile downward channel. The current price is supported at the 60-day moving average and maintains a narrow range consolidation. This round of decline is mainly driven by the dual factors of weakened cost support and continued weak demand. Considering that the current plant operating rate is at a high level, while the downstream is facing a consumption off-season, coupled with limited support from the cost side, the market lacks upward momentum in the short term. It is expected that staple fiber prices will maintain a volatile pattern above the 60-day moving average.
Profit-driven regulation, contradiction turns to balance
In 2025, affected by the weak macro demand and the loosening of upstream cost support, the overall price center of the chemical sector shifted downward, and the prices of various products in the polyester industry chain were under pressure and fell in resonance. Against this background, the processing profit margin of the staple fiber industry was continuously compressed, and for most of the time, it fell below the cash flow cost line of some enterprises. This made the industry operating rate a core mechanism for market self-regulation: when profits deteriorate, enterprises take the initiative to reduce production to ease supply pressure, support prices, and thus dynamically maintain market balance.
Entering 2026, although the current China staple fiber profit level is still significantly lower than the same period in 2025, under the effect of the rebalancing of supply and demand in the industrial chain, it has shown a clear recovery trend compared with the low point at the end of 2025. According to data from Steel Union, as of the week ending January 15, 2026, the China staple fiber profit was -155.65 yuan/ton, an increase of 39.17% from the beginning of 2026. This marginal improvement is mainly due to the phased stabilization of upstream raw material prices, which has mitigated the impact on the cost side.
With the release of profit recovery signals, the market regulatory mechanism has responded swiftly. In the third week of 2026, the operating rate of China's China staple fiber industry has significantly rebounded to 90.86%, a recent high, and the weekly output has reached 173,200 tons, an increase of 0.29% month-on-month. This phenomenon clearly confirms the effectiveness of the market's endogenous regulatory mechanism of "profit - operating rate": the current profit improvement does not stem from the strong pull of end demand, but mainly benefits from the sensitive response and active adjustment of the supply side to price signals.
The establishment of this mechanism indicates that the main contradiction in the market is undergoing a transformation. In the past, the focus of the contradiction was the direct game between "cost pressure and processing profits", while in the later stage, the core contradiction in the market will shift to whether a new dynamic balance can be achieved between "the rapid and flexible release on the supply side" and "the actual undertaking capacity of terminal demand".
Demand enters the seasonal consumption off-season
Currently, the downstream textile industry chain has fully entered a stage of systemic contraction before the Spring Festival, and the demand support for staple fibers is rapidly weakening. This trend is driven by two factors: first, the seasonal slowdown in production rhythm. As the Spring Festival approaches, the operating rates of the yarn and weaving sectors have regularly decreased, and the rigid procurement demand for raw material staple fibers has contracted simultaneously. Second, the "gap between the old and new" in the terminal order cycle. Since orders for overseas Christmas and China New Year have basically been delivered, while new spring orders that will determine post-holiday production have not been issued on a large scale, a significant "window period" has formed on the demand side.
Therefore, the core turning point of the market may point to after the Spring Festival. At that time, the start of the market will depend on two key variables: first, the actual scale and pace of new orders in spring, which form the basis for demand recovery; second, downstream enterprises will make strategic adjustments to raw material inventory levels based on the new orders they have received.
Fluctuations on the cost side may intensify
The price of staple fiber is highly correlated with the prices of its raw materials PTA and ethylene glycol, among which the correlation coefficient with PTA has remained above 0.85 in recent years.
Currently, the price of PTA is mainly anchored to the crude oil market. From the perspective of crude oil fundamentals, the pressure on global oil inventories remains prominent in the first quarter, and oversupply is the core fundamental factor suppressing the central level of oil prices. However, repeated geopolitical situations may trigger short-term sharp fluctuations in oil prices, thereby disrupting the cost rhythm of PTA and staple fibers. It should be noted that if geopolitical risks escalate sharply, it may trigger a pulse-like rise in oil prices, but its sustainability will be constrained by the oversupplied fundamentals.
Looking ahead to the market outlook, the staple fiber market will find it difficult to break away from the volatile pattern in the short term. On the one hand, the situation of loose supply and off-season demand continues. On the other hand, the support from the cost side is limited, so the market is waiting for new driving factors. The strength and rhythm of the recovery of end demand after the Spring Festival will be the key to breaking the current balance and leading the direction.
