Weakening Fundamentals Lead to Declining Prices for Polyester Staple Fiber

January 17th News

According to the commodity market analysis system, this week (January 12-17), the polyester staple fiber market price declined. As of January 17, the average market price of polyester staple fiber (1.4D*38mm) in China was 6,486 CNY/ton, a decrease of 0.8% from the beginning of the week.

As geopolitical premiums fade and inventory pressures mount, international crude oil prices plunged, ending a five-day rally. On January 15, the settlement price of the March contract for U.S. WTI crude oil futures was reported at $59.08 per barrel, down $2.80, or 4.5%. The settlement price of the March contract for Brent crude oil futures was reported at $63.76 per barrel, down $2.76, or 4.1%.

Since January, the PTA market in China has shown a weak adjustment. As of January 17, the spot price of PTA in the East China region was 5,019 CNY/ton, a decrease of 2.02% from the beginning of the week. Recently, there have been both restarts and shutdowns of PTA facilities. The 3,000,000-ton facility of Dushan Energy restarted on January 14, while the 3,600,000-ton facility of Yisheng New Materials shut down on January 14. Additionally, the 1,250,000-ton facility of Zhuhai BP shut down on January 16. Overall, the operating rate has decreased to around 75%.

Raw material support has weakened, and downstream yarn mills are purchasing on a need basis, primarily focusing on maintaining stable prices and shipping goods. At the end-user weaving stage, the overall atmosphere for new orders remains sluggish. At the beginning of the month, driven by rising crude oil prices and increasing costs, some end-users who had little or no inventory—or those intending to stock up on raw materials after the Lunar New Year—began to procure raw materials. Overall shipments remain moderate; some yarn mills reported insufficient orders and plan to gradually shut down and take holidays starting at the end of the month.

Analysts believe that the main raw material PTA has slightly decreased, leading to a weakening in costs; there are no plans for facility adjustments for polyester staple fiber next week, and it is expected that operations will remain stable; under the off-season conditions, textile companies have seen a decrease in orders, leading to reduced enthusiasm for production and a decline in the purchase of polyester staple fiber. It is expected that the market price of polyester staple fiber may decline in the short term.