Polyester Staple Fiber: After the bustling is lonely

On October 9th, under the stimulation of the huge inflation, the polyester short market once again ushered in the “two-day tour” market. In mid-October, the international oil price, which had been oscillating for a long time, finally took the $90 integer mark and went further to $85. At the same time, with the weakening of PX support, PTA and MEG prices fell weakly, the overall mentality of the polyester market was frustrated, polyester and short-term market also entered the down channel, lack of confidence, the focus of market transactions continued to decline, at a glance. At the end of the month, the mainstream price of 1.4D direct spinning polyester and polyester staples has dropped to RMB 10,700 to RMB 10,750/ton, which has fallen by more than RMB 400/ton from the highest point in October. With the weak crude oil trend, the short-term fundamentals of supply and demand, and the suppression of the hollow state, the short-term focus of polyester short-term operation may be further reduced.

Supply and demand fundamentals imbalance

After the National Day holiday, Fujian Jinlun 250,000 tons polyester short new device has been in normal operation, and its daily output of both old and new polyester and short sets is about 1000 tons. Sinopec Yizheng's 100,000-ton polyester-short new device was also successfully put into operation. Previously, the 400,000-ton polyester short new device of Xiangsheng Chemical Fiber Co., Ltd., which failed to run smoothly, has also produced superior products. Although the current daily output is only about 200 tons, if it goes well, its output may increase in November. In addition to the 120,000 tons polyester short new device of Shandong Huijin that was put into operation in the first half of this year, the new capacity of nearly 1 million tons of new polyester and short-term planned for this year will be left to be put into operation at the end of the year. Another set of 100,000 tons of equipment will be put into operation at the end of the year, North China and East China. Polyester and short supply will increase in the three major markets in South China.

In the third quarter, the polyester and the short-run industries collectively restricted the price of insured goods, and inventory was maintained at a low level. Most of the time, it fluctuate around 1 week, and the market supply and demand remained basically balanced. Despite the strong raw materials, polyester and short industries did not suffer large losses. With the production of a huge amount of new production capacity, the market supply and demand balance has been broken, and the relationship between supply and demand is in urgent need of reconstruction.

See hollow state suppression

Judging from the current market conditions, the weakness of the market has a great deal to do with the industry’s general view of the hollow state. The previous bullish news has basically been exhausted, new topics have not yet emerged, and the polyester market is waiting in the middle of confusion. Problems such as overcapacity in the industry, gradual increase of inventories, and no improvement in demand gradually emerged in the fourth quarter. The short and medium price support was insufficient, and the market was bearish on the outlook. The specific performance was as follows: Polyester and short plants had no intention of leaving more inventory; traders dealers were willing to speculate In all cases, the majority of them are fast-forward and fast-moving; the mills generally adopt low-stock strategy to manage raw materials. Therefore, in the short term, it is unlikely that the short-term demand for polyester products will improve the market rebound.

As for the trend of the market in November, if Tesco's short-term market falls, it needs the cooperation of crude oil. The frequent occurrence of hurricanes will limit the downside of oil prices. After the US election, oil prices may make modest corrections to earlier declines. It may be easy to rise or fall in mid-to-late November. In October, the overall profitability of polyester products was poor, and polyester was short on the edge of profit and loss or a small loss. Therefore, in the short-term perspective, the cost of supporting polyester under short-term stability in the weak, social inventory is low, once the favorable external environment to promote, polyester short-term is expected to stop falling. In the medium and long term, the downturn in downstream demand will again trigger a reduction in the production of polyester factories, and we must be alert to the possibility that the entire industry chain will be brought down by the burden. The current increase in inventory has caused concern for manufacturers, if the market outlook further deteriorates, it is expected that some polyester and short manufacturers will promptly reduce production on the agenda, so we need to pay close attention to downstream start-ups and industry inventory.