SunSirs: Periodic Improvement in Demand, Polyester Staple Fiber Prices Stopped Falling and Rebounded

Price trend

According to the SunSirs commodity market analysis system, domestic polyester staple fiber prices have fallen since September before recovering slightly. As of September 15, the average domestic polyester staple fiber (1.4D*38mm) market price was 6,471 RMB/ton, down 0.98% from the beginning of the month. Due to insufficient cost support and low processing fees, mainstream factories have become less willing to actively reduce prices and were instead maintaining profit margins by holding prices, providing favorable support for staple fiber prices.

Analysis review

OPEC+'s production increases were gradually being implemented in the international crude oil market, driving down crude oil prices. As of September 12th, the October WTI crude oil futures contract settled at $62.69 per barrel, and the November Brent crude oil futures contract settled at $66.99 per barrel. OPEC+ maintained its production increase in October, increasing the risk of oversupply. Furthermore, with the traditional peak fuel season coming to an end and demand entering a turning point, the supply-demand landscape was showing a surplus. Coupled with the lack of escalating geopolitical tensions for the time being, crude oil prices are likely to continue to weaken.

Since September, the domestic PTA market has seen a slight decline, with the average spot price in East China at 4,631 RMB/ton, down 2.6% from the beginning of the month. Recently, the restart of maintenance facilities at Hengli Huizhou and Xinfengming in early September has partially alleviated the tight domestic PTA supply situation. The industry operating rate was around 77%. While PTA initially relied on production restarts to maintain destocking, this trend is unlikely to continue in the future. With new facilities expected to come online in October, continued growth in domestic supply is expected.

Downstream spinning order demand has rebounded compared to the previous month. While overall order volume fell short of expectations, positive news has boosted sentiment among industry players, leading to a modest increase in polyester staple fiber purchases. Entering the traditional "Golden September" shopping season, sales of thermal fabrics, particularly those in the home textiles sector, have performed well, with the home textiles sector contributing some incremental demand. While demand for autumn and winter fabric samples from some grey fabric mills has not seen a significant improvement, there has been a temporary recovery. As of September , orders are still primarily small and discrete.

Market outlook

Analysts of SunSirs believe that that PTA supply continued to increase on the cost side, and with the expected peak season of September not yet arriving on the demand side, terminal companies were ramping up production slowly. Without new positive factors to boost the market, the upward trend in the polyester staple fiber market may be difficult to sustain in the short term.

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