July 25th, according to news,
This week, polyester staple fiber experienced a cost-driven volatile market. According to the commodity market analysis system, as of July 24, the average market price of polyester staple fiber (1.4D*38mm) in China was 7662 CNY/ton, an increase of 1.96% from the beginning of the week.
The attack on a Red Sea oil tanker and the escalating U.S.-Iran standoff have pushed Brent crude oil firmly above the $100 mark, providing strong support from the cost side. Meanwhile, concentrated maintenance at upstream PX plants continues to reduce inventories, resulting in an overall tight supply situation. Coupled with centralized maintenance in the PTA industry, monthly inventory reductions have been substantial, driving spot inventories down to multi-year lows and solidifying the price floor for polyester staple fiber from top to bottom. At the same time, polyester staple fiber producers are proactively limiting output and reducing capacity utilization, keeping industry operating rates around a relatively low level of about 75%. Social inventories are steadily declining, and factories remain strongly inclined to hold prices.
Looking ahead, on July 23, the crude oil market saw a sharp rise as the attack on a Saudi oil tanker in the Red Sea coincided with the escalating U.S.-Iran standoff. This convergence of risks at two key Middle Eastern oil transit routes triggered a new round of significant price increases in international crude oil. Brent crude once again firmly broke through the $100 mark for the first time in two months. The September contract for U.S. WTI crude oil settled at $92.19 per barrel, up $5.36, or 6.2%. The September contract for Brent crude oil settled at $100.69 per barrel, up $6.62, or 7.0%. Given the ongoing geopolitical tensions in the short term, crude oil prices are expected to remain on an upward trajectory.
This week, PTA prices followed the crude oil market and increased, reaching 6170 CNY/ton in the East China region by July 24th, a 1.49% increase from the beginning of the week. The downstream weaving industry is still in the traditional off-season, with downstream polyester factories only purchasing based on immediate needs, thus limiting the price increase. The concentrated maintenance of PTA in July reduced the industry's operating rate to around 53%, and it is expected that 900,000 tons will be destocked for the entire month, with spot inventory reaching a multi-year low, providing strong support for prices. However, hundreds of thousands of tons of PTA facilities from Honggang Petrochemical, Fuhai Chuang, and Zhongtai Chemical will restart at the end of July to early August. The market has already started trading on the expectation of increased supply, significantly slowing down the destocking speed, and processing fees will gradually decrease from their previous high levels.
On the demand side, it is currently the traditional off-season for summer textiles. The operating rates of yarn mills in the Jiangsu and Zhejiang regions remain low, with a significant buildup of grey cloth inventory. Downstream yarn mills are sticking to rigid demand procurement, buying as needed, and have no intention of actively replenishing stocks on a large scale, resulting in insufficient momentum for a bullish trend. The market is pessimistic about the strength of the peak season recovery, making it difficult for loom operating rates to improve. Additionally, the uncertainty of geopolitical issues makes it hard for textile enterprises to smoothly pass on cost pressures to the end market. Textile companies are maintaining a state of low inventory and high turnover.
Overall, analysts believe that in the short term, the crude oil market and the high number of PX maintenance activities, along with low PTA supply, will continue to support the cost side. However, the downstream sector is struggling to follow the price increases, and there are concerns about the potential return of PTA supply in the future, which could weaken costs. Additionally, terminal demand remains weak during the off-season, which will limit the continuous rise in the price of polyester staple fiber.
