SunSirs: China's Polyester Staple Fiber Futures and Spot Prices Fell Sharply in March

1. Price Trend

The domestic spot price of polyester staple fiber fluctuated and fell in March. As of March 31, the average domestic spot market price of polyester staple fiber was 7,140 yuan/ton, down 9.98% from the price of 7931 at the beginning of March and up 19.63% year-on-year. All manufacturers' quotations have been raised significantly by 700-1000 yuan/ton.

In the futures market, the main staple fiber futures (2105) on March 31 closed at 6879 in early trading, down 1492 or 17.84% from the opening of 8304 in early March. In March, international oil prices fluctuated and fell back nearly 13% after hitting highs at the beginning of the month. The prices of staple fiber raw materials PTA and ethylene glycol fell sharply.

Costs dropped sharply, trade intermediaries dumped goods, downstream stocks were fully stocked before the holiday to insufficient purchases, polyester staple fiber production and sales fell sharply, and futures stocks continued to fall. At present, the supply and demand situation of staple fiber has not been reversed. After the price declines, industry profits continue to shrink, processing margins have fallen to a low level, and short-term downward space may be limited.

2. Factors affecting prices

PTA: In March, the domestic PTA spot market price dropped from the high level at the beginning of the month. As of March 31, the average spot market price was 4,413 yuan/ton, down 6.96% from the beginning of the month and up 37.43% year-on-year. Profits continue to decline, and most of the PTA devices have suffered a loss in production, causing many PTA devices to choose to stop work for maintenance. The increase in the number of new crown cases in Europe and the restart of blockade restrictions, the market is worried that the impeded vaccination process in Europe will damage the economic recovery and fuel demand. The sharp drop in crude oil has dragged down the focus of the chemical market and weakened PTA cost support.

Ethylene glycol: The domestic spot market price of ethylene glycol rose and fell in March. As of March 31, the average spot market price was 5333 yuan/ton, down 11.85% from the beginning of the month and up 58.42% year-on-year. The European epidemic control policy and other factors have affected the price of crude oil, ethylene has also entered a callback range, the price has fluctuated downward, the cost side support is weak, the downstream chemical fiber production and sales are relatively thin, the shipment volume continues to be low, the supply and demand pattern is not good, from the market trend over the years , March and April are all bottoming, but this year, affected by the previous speculation, the downward trend in prices is more obvious.

Polyester yarn: The domestic market price of polyester yarn fell slightly in March, and there are signs of stabilization at the end of the month. As of March 31, the average market price of polyester yarn was 14,266 yuan/ton, down 3.39% from the beginning of the month and up 5.37% year-on-year. At present, the raw material inventory of yarn companies is mostly available until early and mid-April. Before late April, pre-sale orders are mainly completed before and after the Spring Festival, and the company's external quotations are not positive. Spot sales of polyester yarns were weak, quotations and transaction prices peaked and fell, inventory accumulated, and prices were weakly adjusted.

3. Market outlook forecast

SunSirs analysts believe that international oil prices fluctuated and fell in March, and upstream PTA and ethylene glycol followed the decline. The post-holiday market due to the booming demand for downstream production and a large number of stocks, domestic staple fiber production and sales and prices continue to rise. At present, the raw material inventory of spinning mills is relatively high. The terminal market is worried about the trade situation, orders are not as expected, and the willingness to replenish goods is weakened. However, with the digestion of raw materials, the downstream will continue to meet the demand for replenishment; in addition, after the continuous decline, the profit of staple fiber has fallen to a low level, and there is little room for further decline. At present, enterprises with unknown industrial chain situation often choose to buy as they use it. Staple fiber prices may stop falling later than expected. Looking at the market outlook, short-term polyester staple fiber accumulation pressure is still, or still weak and fluctuating. However, in the medium term, with the advent of a new round of downstream procurement cycle, the processing difference is compressed and there is repair momentum, and polyester staple fiber may usher in a shock rebound in April.

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