According to the Commodity Market Analysis System of Shengyi Society, the domestic polyester staple fiber market showed a “inverted V” trend in May. As of May 29th, the average market price of domestic polyester staple fiber (1.4D * 38mm) was 6522 yuan/ton, an increase of 2.69% from the beginning of the month. The cost increase in the first half of the month has driven the price of polyester staple fiber more, but in the second half, with the weakening of raw material support and stagnant demand, the price of polyester staple fiber has weakened. Looking at the future market:
The current settlement price of the main contract for WTI crude oil futures in the US crude oil market is $61.84 per barrel, and the settlement price of the main contract for Brent crude oil futures is $64.32 per barrel. Trump has postponed imposing tariffs on the European Union, but OPEC and its allies are considering another significant increase in production, so the oil market is weighing the short-term prospects of easing trade tensions and increasing OPEC+supply.
Recently, with the restoration of PX benefits, some domestic and foreign facilities have increased their capacity, and early-stage maintenance facilities have gradually restarted. For example, the 1.6 million ton facilities of Zhongjin Petrochemical and the 4 million ton facilities of Zhejiang Petrochemical have been restarted in advance, resulting in a gradual increase in PX supply. The gradual reduction in downstream polyester production, weakened supply and demand margins, and limited support for crude oil prices have put significant upward pressure on PX. However, as the downstream PTA load gradually increases, the short-term supply and demand of PX are good, and the current spot market supply is tight, PX is still relatively resistant to decline.
In May, PTA plants underwent centralized maintenance, and in the latter half of the year, PTA plants were gradually restarted. As of the end of the month, the PTA industry’s operating rate was around 78%. In terms of price, the domestic PTA spot market in May showed a trend of first rising and then falling. As of May 29th, the average price of PTA in the East China region was 4972 yuan/ton, an increase of 8.47% from the beginning of the month. After the repair of the disk processing fee, the implementation of device maintenance in June and July may not meet expectations. New production capacity such as Honggang Petrochemical Phase III and Hailun Petrochemical Phase III will be put into operation from June to August, with a focus on loose supply in the long term.
Under the sharp rise in raw material prices, downstream yarn factories have expanded their losses, and pure polyester yarn processing fees continue to be under pressure, resulting in insufficient repair power. In addition, with the expectation of China’s export rush to the United States gradually coming to an end in late June and the arrival of the off-season for domestic sales, the production of weaving machines in Jiangsu and Zhejiang is around 70%, and the atmosphere of raw fabric orders has once again fallen, making it difficult to raise fabric prices. After stocking up at a low level at the terminal, the main focus is on digesting raw material inventory, and cautious observation is needed for first-time purchases.
Overall, analysts from Shengyi Society believe that crude oil prices are dominated by geopolitical risks and policy games, and unexpected events may drive up oil price volatility. The increase in supply brought about by the launch of new PTA production capacity and the restart of maintenance facilities will suppress the upward space of PTA prices. The cost support will be weakened. On the demand side, the domestic and foreign trade orders at the terminal are weak. After the Dragon Boat Festival, the downstream is pessimistic about the future market, and the enthusiasm for receiving goods is not high, so the pressure on the staple fiber factory to destock is increasing. Short term short fiber prices are expected to follow fluctuations in crude oil prices, and there is still a downside risk overall.
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