According to the Commodity Market Analysis System of Shengyi Society, the domestic polyester staple fiber market fluctuated and weakened in February. As of February 27th, the average market price of domestic polyester staple fiber (1.4D * 38mm) was 6880 yuan/ton, a decrease of 3.37% from the beginning of the month. The average ex factory price of mainstream factories in Jiangsu and Zhejiang regions is 7218 yuan/ton, a decrease of 1.37% from the beginning of the month. In the first half of the month, some PX facilities reduced their load and shut down, leading to a strong rise in PX prices and a positive boost in costs. But with the easing of the geopolitical situation in Europe, the decline in international crude oil prices, weakened cost support, and less than expected demand recovery, the price of polyester staple fibers has accelerated its decline.
Looking at the future, on the cost side, the unexpected increase in US refined oil inventories in the crude oil market indicates that the expectation of weak demand will not change, coupled with the pressure on oil prices brought by the Ukraine Russia peace agreement. As of February 26th, the settlement price of the main contract for WTI crude oil futures in the United States was $68.62 per barrel, and the settlement price of the main contract for Brent crude oil futures was $72.07 per barrel. Further attention needs to be paid to tariff policies, OPEC+production plans, etc., as the oil market is likely to continue to fluctuate widely.
On the one hand, the PX market is affected by fluctuations in crude oil prices, and on the other hand, from the perspective of supply and demand fundamentals, there is a concentrated maintenance plan for PX facilities in Asia in the second quarter, and some short process facilities may continue to operate with reduced production. Due to the pressure of processing space, there is a possibility of expanding the maintenance scale of PTA on the demand side, and the prospects for the supply and demand pattern are not optimistic. However, the expected increase in demand for oil blending may have a temporary boost effect on the PX market. The expectation of reduced supply and demand pressure drives market confidence to rebound, and prices are expected to run stronger.
The PTA market in February first rose and then fell. As of February 27th, the average price of PTA in the East China region was 4967 yuan/ton, a decrease of 0.5% from the beginning of the month. Under the low processing fees, PTA factories have increased maintenance, and the PTA industry’s operating rate was around 79% at the end of February. Some units were still undergoing maintenance in March and April.
On the demand side, downstream polyester production and sales recovery fell short of expectations, and there were not many new orders in the terminal textile industry. As of the end of February, the operating rate of the weaving machine industry in Jiangsu and Zhejiang was 66%. There is limited room for further improvement in operating rates, and yarn inventory is at a high level. Even if terminal demand starts, it is difficult to quickly form positive feedback. The slow issuance of new orders for domestic and foreign trade, coupled with difficulties in negotiating new orders, has led to a cautious attitude towards the recovery of demand in March, which has dampened market confidence.
Business Society analysts believe that the current pressure on the accumulation of polyester staple fiber inventory is prominent. In addition, after the Spring Festival, the production of polyester staple fiber industry has steadily increased at a high level, but the recovery speed of downstream spinning industry is slow. Therefore, the weak supply and demand structure has dragged down the market mentality, and the pressure has intensified. But as the textile industry gradually enters the traditional peak demand season, the demand side will improve or drive up the price of polyester staple fibers.
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