SunSirs: Driven by the Combined Impact of Costs and Production Cuts, Polyester Staple Fiber Prices Trended Upward with Fluctuations in August

According to SunSirs commodity market analysis system, the polyester staple fiber market exhibited a trend of initial decline followed by a rebound in August; the average market price for polyester staple fiber (1.4D*38mm) at the beginning of the month was 7,564 RMB/ton, marking a 3.34% increase by the end of the month. This upward movement was primarily driven by rising upstream costs combined with proactive production cuts within the industry aimed at supporting prices, although downstream terminal demand remained weak.

In early August, the domestic textile industry was in a seasonal lull characterized by high temperatures, and orders for the autumn/winter season had not yet been released in volume. Downstream yarn mills were cautious in their purchasing, limiting themselves to replenishing only essential stock; consequently, market trading was sluggish, and prices for staple fibers fluctuated at low levels. With PTA prices remaining relatively stable, the processing spread for staple fibers stayed inverted, leading to widespread losses among enterprises and a lack of upward momentum. However, as the month progressed, international crude oil prices rose due to geopolitical tensions, driving up the costs of raw materials—PTA and ethylene glycol—and significantly increasing production expenses. Amidst deepening industry losses, major staple fiber producers began cutting output to support prices by voluntarily reducing operating rates, which tightened the supply of spot goods. The convergence of these factors pushed polyester staple fiber prices upward amidst fluctuations.

Looking ahead to September, the polyester staple fiber market is set to enter a phase of tug-of-war between bullish and bearish forces; prices are likely to fluctuate at high levels, with limited momentum for a significant, sustained rally. On the supply side, industry-wide production cuts aimed at supporting prices will persist, though the pace of production restarts following any recovery in profit margins warrants close monitoring. Should processing margins improve, the anticipated restart of certain facilities would increase supply, thereby capping the potential for price gains.

On the cost side, PTA units undergoing maintenance are successively restarting, leading to a marginal easing of feedstock supply and a weakening of cost support; meanwhile, port inventories of ethylene glycol remain low, providing a degree of price support, though overall costs are driven primarily by fluctuations in crude oil prices.

The demand side is entering the traditional "Golden September" peak season, yet there remains significant uncertainty regarding the recovery of end-market textile orders. Downstream yarn mills are holding high levels of finished product inventory and show little inclination to restock. Should peak-season orders fall short of expectations and downstream purchasing remain sluggish, the price of staple fibers may face downward pressure. Moving forward, key factors to monitor include the extent of production cuts, fluctuations in raw material prices, and the actual volume of orders secured.

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