SunSirs: Poor Performance in Terminal Demand, Polyester Filament Prices Declined Slightly

Price trend

According to the Commodity Market Analysis System of SunSirs, the prices of domestic polyester filament had slightly decreased this week (June 12-16). As of June 16, mainstream polyester filament factories in Jiangsu and Zhejiang regions had quoted prices of 7,500-7,800 RMB/ton for polyester POY (150D/48F), 8,850-9,350 RMB/ton for polyester DTY (150D/48F low elasticity), and 8,050-8,350 RMB/ton for polyester FDY (150D/96F).

Analysis review

The retail unexpected increased in the United States in May, and positive employment data supported. The significant increase in processing capacity of Chinese refineries led to an upward trend in the oil market. As of June 15th, international crude oil futures had risen. The settlement price of the main contract for WTI crude oil futures in the United States was 70.62 US dollars per barrel, while the settlement price of the main contract for Brent crude oil futures was 75.67 US dollars per barrel.

In terms of PX, the occurrence of unplanned load reduction had tightened the monthly supply and demand balance, resulting in stronger prices. Squeezing the PTA spot processing fee to below 200 RMB had led to a decrease in the enthusiasm for PTA device operation, with the industry operating at around 73%. Affected by this, PTA stopped falling and recovered. As of June 16, the PTA market price in East China was 5,737 RMB/ton, up 2.52% from the beginning of the week (June 12).

As the cost side atmosphere improved, downstream enterprises increased their replenishment actions. However, in the traditional off-season of high temperature and humidity, terminal demand performed poorly, with weak cash flow and inventory accumulation, resulting in a decline of less than 60% in the construction of Jiangsu and Zhejiang weaving factories. Moreover, the recently released data on textile and clothing exports was relatively weak. In May, textile and clothing exports in US dollars were 25.32 billion US dollars, a decrease of 13.1%, and a month on month decrease of 1.3%. Among them, textile exports were 12.02 billion US dollars, a decrease of 14.2%, and a month on month decrease of 5.6%. Clothing exports were 13.3 billion US dollars, a decrease of 12.2%, and a month on month increase of 3%.

Market outlook

Analysts from SunSirs believe that there were still expectations of an upward shift in crude oil prices recently, and there was still fermentation in the unplanned production reduction operation of multiple domestic PX devices, resulting in stronger cost support. Downstream demand had gradually improved, but the recovery of demand in the off-season was limited, and it is expected that the price of polyester filament will still be weaker.

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