[168TEX News] The polyester staple fiber market was booming in April, with market conditions improving all the way, oil prices firming, raw materials also rising, and cost support strong. However, it is not difficult to see from the picture below that the polyester staple fiber market began to consolidate and decline in May.
In early May, under favorable cost conditions, the market price of polyester staple fiber rose steadily to about 8,100 yuan/ton; in early mid-May, as the upstream market declined within a narrow range, downstream buying was sluggish, and the transaction resistance in the polyester staple fiber market increased. The market is talking about a narrow correction. As of May 18, the market price of polyester staple fiber was around 7,850 yuan/ton, a decrease of 1.26% from the beginning of the month.
1. Upstream benefits have been exhausted
Since the second half of March, the crude oil market has shown an overall upward trend. Recently, U.S. crude oil inventories have fallen from high levels and the summer gasoline consumption peak is approaching, and the market is still very optimistic about oil price expectations. However, the rebound in oil prices has delivered most of the benefits; coupled with the strong market expectations for the Federal Reserve to raise interest rates in September, the US dollar is likely to return to strength again after adjustments. Therefore, oil prices may face periodic peaking pressure.
Observing the chart above, we can see that PTA has slowed down significantly recently in following the trend of crude oil, and oil prices have continued to rise. However, raw material PTA has been weak due to high social inventories, the restart of early maintenance equipment, and the commissioning of new production capacity equipment in the later period. The positive support brought by the early device explosion accident has also been exhausted. If there is no new driving force in the market later, the market will gradually weaken.
The recent support at the crude oil level is still there, but the original positive support in the ethylene glycol market has basically been exhausted. Although the recent fundamental performance is still strong, the support for the market has gradually weakened. The long-term flat production and sales have led to a lack of market confidence, coupled with the impact of the release of new production capacity in June. Therefore, overall, the mid- to long-term outlook is weak, but there is still the possibility that the market will use delivery momentum to rise before the end of this month.
2. Downstream manufacturers have low buying interest
With the recent macroeconomic weakness, the textile and apparel industry is facing sluggish export and domestic sales. Judging from market feedback, the off-season has quietly arrived. Orders in the overall market have decreased compared with the previous period, and some dyeing factories have also switched from operating at full capacity in the early period to intermittent shutdowns; the inventory of conventional varieties of textile enterprises has also increased. The shipping speed of polyester yarn shows signs of slowing down compared to the previous period. Some spinning companies that produce polyester yarn seem to have predicted that the market outlook will continue to weaken. They are now seizing the opportunity to increase shipments, so the transaction price is certain. There is room for negotiation; even so, there are very few large orders, and the price of large orders is very strong. Currently, most of the orders are small ones, the requirements are generally higher, and the delivery time is still tight. The maintenance of polyester yarn sales mainly relies on early orders. New orders are due to price negotiations, so order placement is slightly slow. The overall sales volume has weakened, mainly because the total market demand is limited, and the market outlook is not optimistic. Each manufacturer controls risks and will not actively prepare goods in an orderly manner, and all adopt rigid-need purchases.
To sum up, the positive factors in the upstream and downstream sectors have been exhausted, and the situation in the polyester staple fiber market is not optimistic. Recently, the production and sales of direct-spun polyester staple fiber companies have continued to be sluggish, and some factory inventories have increased. In addition, there are forecasts for an increase in the start-up of raw material PTA, so it is expected that prices will still have room to fall in the near future.
