SunSirs: The Fundamental Weakness Was Hard to Change, and the Price of Polyester Staple Fiber Continued to Decline

Price trend

According to the commodity market analysis system of SunSirs, the domestic polyester staple fiber price fluctuated downward in August. As of August 18, the average market price of domestic polyester staple fiber (1.4D*38mm) was 6,472 RMB/ton, down 1.58% from the beginning of the month.

Analysis review

With weakening raw material support and the US's traditional peak fuel consumption season drawing to a close, supply-side risks remained. International oil prices are expected to fluctuate in the short term. As of August 15, the September contract for WTI crude oil futures settled at $62.80 per barrel, while the October contract for Brent crude oil futures settled at $65.85 per barrel.

Since August, the domestic PTA spot market has continued its downward trend. As of August 18, the average PTA price in East China was 4,720 RMB/ton, down 2.09% from the beginning of the month. Regarding PTA plants, Formosa Chemicals and Hainan have shut down, while Weilian and Jiaxing have restarted. Reduced idled plants continue maintenance, leading to a rebound in overall supply. Helun Petrochemical's 3.2 million ton plant completed a trial run at the end of July and was gradually increasing production. The industry's overall operating rate remained around 76%.

High inventories in downstream weaving industries were weighing on sentiment, making it difficult for yarn mills to consistently restock. This led to a wait-and-see attitude among yarn mills, with purchases primarily driven by immediate needs. August, traditionally a low season for demand, coupled with no signs of improvement in end-market demand, had led to a lukewarm buying of staple fibers.

Market outlook

Analysts of SunSirs believe that sluggish international oil prices, coupled with the commissioning of new PTA plants, had led to a slight increase in supply. Costs continued to decline, and with no significant improvement in demand expected, polyester staple fiber prices are expected to continue to fluctuate downward.

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