Cost-side support weakens, polyester staple fiber prices slightly decline

May 17th, according to the news

Commodity market analysis system, since May, the market price of polyester staple fiber in China has shown a slight decline. As of May 17, the average market price of polyester staple fiber (1.4D*38mm) in China is 8,136 CNY per ton, a decrease of 2.48% from the beginning of the month.

Cost-side support has weakened, and crude oil and PX prices have been fluctuating at high levels. Crude oil prices have been undergoing volatile adjustments: as of May 14, the settlement price for the June contract of U.S. WTI crude oil futures stood at $101.17 per barrel, while the settlement price for the July contract of Brent crude oil futures was $105.72 per barrel. In Asia, PX production has been undergoing synchronized maintenance, leading to tight supply and a solid cost floor; however, downward transmission of these costs lacks sufficient momentum.

Since May, the PTA market in China has generally shown a weak trend. As of May 17, the average spot price of PTA in the East China region was 6,573 CNY/ton, a decrease of 4.29% from the beginning of the month. At the beginning of the month, due to PX cost support and large-scale PTA plant maintenance, prices briefly rose to around 6,700 CNY/ton. However, as the demand for downstream polyester and terminal textiles remained weak, coupled with the easing of geopolitical tensions leading to a decline in crude oil premiums, prices have since fluctuated and declined.

The demand side remains weak, and with production costs remaining relatively high, pricing sentiment in the downstream pure polyester yarn market is generally subdued. Actual transactions are mainly conducted through negotiated prices. Some yarn mills have reduced production to maintain rigid demand procurement. Overall, market expectations for the future remain weak, and acceptance of yarn products made from high-priced raw materials remains low. The market continues to be characterized by a cautious, wait-and-see attitude. On the end-user side, although autumn/winter orders and export orders have gradually started picking up since late May, it will be difficult for the situation to improve significantly in the short term.

Analysts believe that in the short term, the reduction in polyester staple fiber production in China is increasing, but demand expectations are mediocre. The demand during the off-season is unlikely to recover quickly, which will put downward pressure on prices. Additionally, looking at the spot market, the 10-day moving average has crossed below the 20-day moving average, and the difference between the two continues to widen negatively. The further divergence of the 10-day and 20-day moving averages indicates that the polyester staple fiber market in China is entering a downward trend.

Additionally, considering the 5-level positioning: The current price is at or near the highest levels over the past 90 days and the past year, so we should be vigilant about the risk of a short-term decline.