SunSirs: Driven by Favorable Cost Factors, the Price of Polyester Staple Fiber Rose in December

Price trend

According to SunSirs' commodity market analysis system, in December, polyester staple fiber showed a trend of initial weakness followed by stability and then a price increase. As of the end of December, the average market price of domestic polyester staple fiber (1.4D*38mm) was 6,510 RMB/ton, a 2.93% increase compared to the beginning of the month. Rising costs were the main driver of the price increase, but weak demand during the off-season and poor cost transmission limited further price increases for staple fiber.

Market Analysis

Despite a decline in the average monthly price of crude oil, the tight supply of PX continued, leading to a counter-trend price increase. PX prices rose steadily in December, with the average monthly price increasing by over 3% compared to the previous month. Meanwhile, India's removal of BIS certification restored China's PTA export channels, resulting in PTA exports of 358,900 tons in November, a 61.26% increase compared to the previous month, easing domestic supply pressure. This contributed to the rise in PTA prices, with the spot price of PTA in East China reaching 5,082 RMB/ton by the end of December, an increase of 8.07% compared to the beginning of the month. Ethylene glycol, however, experienced loose supply and demand, resulting in weaker prices and limited support for short fiber costs.

Costs were rising faster than product prices, leading to compressed industry profits, and increased losses for some staple fiber factories. From a company perspective, there was no new capacity added throughout the year, and older facilities were decommissioned, reducing annual capacity to 9.875 million tons. Factories increased production cuts or maintenance, resulting in low inventory levels and tight supply, which supported upward price movements.

With downstream demand entering its off-season, yarn factories were cautious in their raw material procurement, resulting in limited new orders and accumulating finished goods inventory. The overall operating rate of weaving mills was approximately 61.5%. Winter orders were winding down, and the later timing of the Spring Festival delayed spring orders, leading to a prevalence of small-batch, urgent orders. There was a strong expectation of earlier factory closures for the holiday. Both domestic and export demand for textiles and apparel were weak, providing insufficient support for upstream industries.

Market Outlook:

According to analysts at SunSirs, positive factors on the cost side will continue in the short term, with rising PX prices and a continued tight supply situation. PTA factories are actively reducing production or shutting down, and export volumes have increased significantly, easing domestic supply pressure. However, the downstream textile industry is entering its traditional off-season, leading to weak demand. Therefore, the upward potential for polyester staple fiber prices will be limited.

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