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SunSirs: Upstream and Downstream Drag Polyester Prices Fluctuate Weakly

April 29 2020 08:25:57     SunSirs (Linda)

According to SunSirs price monitoring, the domestic polyester market price in April showed a trend of rising first and then falling. At present, polyester POY 150D / 48F in mainstream factories in Jiangsu and Zhejiang reported 4,900-5,050 yuan / ton, and DTY 150D / 48F low elasticity reported 6,400-6,900 yuan / Tons, polyester FDY150D / 96F reported 5,550-5,600 yuan / ton. At the beginning of the month, affected by the news of crude oil production reduction, the raw material market was strongly supported, speculative bottom-up replenishment market appeared, and the transaction volume of polyester products increased slightly, and the price rebounded slightly. However, with the weakening of raw materials and weak demand, the market trading atmosphere has cooled. On April 10th, the price began to fall, among which polyester POY fell more obviously. As of the 27th, the average market price of polyester POY (150D / 48F) was 4,944 yuan / ton, which was a decrease of 7.83% from the 10th.

Polyester market average price fluctuation, unit: yuan / ton

On the raw materials side, the market sentiment of crude oil plummeted was frustrated, suppressing the sentiment of the energy sector. Although prices have recently stopped falling, they have remained low. Global crude oil demand has shrunk sharply, but the supply side is still showing an increase. Under the pressure of storage capacity, the market is basically still weak. In March, affected by the weakening domestic demand, PTA factories had high inventory pressure, and domestic PTA production companies have overhauled and stopped production. The PTA operating rate fell to 69% in mid-to-late March. With the end of the overhaul period and the impact of weakening crude oil, the closer the upstream chemical products are the more they fell,. Last week, the PTA processing fee once rose to 805 yuan / ton, at such a high level, the production enthusiasm of the PTA plant is very high, which has led to the recent PTA operation rate has been above 90%, significantly higher than the previous year. At the same time, there has been no significant improvement on the demand side, so the entire April PTA is still clearly accumulating, so far PTA social stocks are 3.35 million tons. And it should be noted that with the new devices being put into production, the domestic PTA capacity has reached 52.255 million tons, and the PTA capacity in 2020 is significantly higher than the previous year's capacity base, so the overall market supply pressure is very large.

The downstream weaving industry is sluggish. At present, the trading volume of China Textile City is significantly lower than that of the same period in recent years, and the market trading is light. Judging from the operation rate of Jiangsu and Zhejiang looms, as of April 26, the comprehensive start-up rate was 48.00%. In the face of the upcoming May Day holiday, some companies have begun to take vacations. At the same time, due to the impact of COVID-19, weaving foreign trade export orders were cancelled or delayed in large quantities. In the first quarter of 2020, China's textile and apparel exports totaled 45.26 billion U.S. dollars, a decrease of 17.7% over the same period of last year. Among them, textile exports 22.69 billion US dollars, a year-on-year decrease of 14.6%; clothing exports of 22.57 billion US dollars, a year-on-year decrease of 20.6%.

SunSirs analysts believe that due to the impact of crude oil decline, the cost center of gravity has shifted down, and PTA continues to accumulate pressure. No inflection point has been seen. High inventory may become the normal state of PTA. The current PTA fundamentals are not good to boost. Downstream terminal weaving foreign trade orders are missing, domestic demand has not yet fully recovered, and nearing the May Day holiday, some weaving companies have plans to stop work and take vacations in advance, and there is an expectation of negative burden. Affected by the drag of the upstream and downstream, it is expected that the polyester market will be weak in the short term.

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