SunSirs: Crude Oil PTA Rises, China's Polyester Staple Fiber Production and Sales Rebound (11.21-27)

1. Price Trend

According to SunSirs price monitoring, the domestic polyester staple fiber spot price trend remained stable last week. As of November 27, the average domestic polyester staple fiber spot market price was 5738 yuan/ton, down 16.30% year-on-year. A few manufacturers have slightly increased their quotations. In the futures market, staple fiber main futures (2105) closed up on November 27, closing at 6096, an increase of 1.5%. Higher crude oil and a rebound in PTA led to a rebound in polyester staple fiber futures, and a rebound in futures led to a sharp rebound in spot production and sales. However, it is difficult for the spot polyester staple fiber to continue to strengthen due to demand constraints.

2. Factors affecting prices

PTA: The domestic PTA spot market rebounded slightly last week. Last weekend, the average domestic PTA spot market price was 3341 yuan/ton, down 30.37% year-on-year. Crude oil is affected by the positive news of the new crown vaccine and OPEC+ is expected to further maintain the current over-scale production cut news. Crude oil rushed higher cost support and strengthened, boosting the rebound of PTA prices.

Ethylene glycol: The domestic ethylene glycol spot market rose last week. Last weekend, the average ex-factory price of oil-based ethylene glycol in North China was 3,805 yuan/ton, down 20.73% year-on-year. Inner Mongolia Rongxin and Taiwan's two installations have been overhauled and the supply is tight, the cost of crude oil has risen, and the price of ethylene glycol has rebounded. However, the downstream chemical fiber market has gradually entered the off-season, production and sales have fallen, and the accumulation of ethylene glycol may reappear, and the downward pressure on the market will increase.

Polyester yarn: The domestic polyester yarn market operated smoothly last week. Last weekend, the average spot market price of 32S polyester yarn in Jiangsu, Zhejiang and Shanghai was around 13,375 yuan/ton, down 7.03% year-on-year. Downstream markets stock up for the New Year, but orders for shopping festivals are gradually completed. Follow-up orders are weak, loom start-ups have fallen, and polyester yarn companies' inventories have increased month-on-month.

3. Outlook

SunSirs analysts believe that the recent increase in crude oil is good for market production and sales, and the strong upstream raw material prices form a strong support for costs. However, the downstream market’s “Double Eleven” and “Double Twelve” orders entered the traditional off-season after the gradual delivery, with poor new orders, high inventory of polyester yarn mills, and a decline in the weaving operation rate. After the hot spot production and sales of staple fiber, the inventory level has risen, the enthusiasm for short-term follow-up purchases may be weakened, and the wait-and-see mood has increased. It is expected that the short fiber spot market will enter the stage of accumulation in the market outlook. If the spot price is not driven by futures, it may fall. However, the current crude oil continues to rebound, short-term staple fiber futures may continue to oscillate strongly.

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