Cost Support, Polyester Staple Fiber Prices Continued to Rebound in January

1. Price Trend

In January, domestic polyester staple fiber prices continued to fluctuate and rebound. According to the price test of the business agency, the average spot market price of domestic polyester staple fiber on January 31 was 7518 CNY/ton, an increase of 6.24% compared with the price of 7076 at the beginning of the month and a year-on-year increase of 17.97%. In the futures market, the main staple fiber contract at the end of the month closed at 7606, up 7.58% from the beginning of the month.

The main reason for the price increase of polyester staple fiber this month is cost-driven: the international crude oil price hit a new high for seven consecutive years this month, with a monthly increase of nearly 17%. At the end of the month, WTI New York crude oil CFD closed above 88. The rise in oil prices has driven the price of PTA ethylene glycol, the upstream raw material of staple fiber, to rise, with an increase of about 10%.

2. The factors that affect the price

In January, the domestic PTA market maintained an upward trend. The average market price in East China was 5,425 CNY/ton, a monthly increase of 9.31% and a year-on-year increase of 42.72%. The positive support of crude oil has helped the PTA market continue to rise this month. Expectations of tight supply continued to boost oil prices, tensions between Russia and Ukraine escalated, and the Organization of the Petroleum Exporting Countries (OPEC) increased production less than expected. The pressure on the supply side is still there. In January, several domestic PTA plants were restarted, and the industry start-up increased to more than 86%. The 3.3 million-ton new plant of Yisheng New Materials was put into operation at the end of January, and the PTA supply is expected to increase. However, two sets of PTA units in East China announced maintenance plans, which boosted the market significantly. Among them, Yisheng Ningbo’s 2 million-ton PTA unit is scheduled to be overhauled in February; Yisheng New Materials’ 3.3 million-ton/year PTA unit is scheduled to be overhauled in February.

In January, ethylene glycol followed the fluctuation of crude oil and rose. The spot price of ethylene glycol in the East China market rose, with an average price of 5387.5 CNY/ton, an increase of 507.5 CNY/ton compared with the beginning of this month, an increase of 10.4%. From the perspective of cost, crude oil prices are firm and continue to fluctuate at high levels, reaching historical highs for a time. Coal shipments are in good condition, and there is strong support on the cost side. From the perspective of the supply side, the previous maintenance devices will also be restarted one after another, and the MEG operating rate has gradually increased this month. As the Spring Festival is approaching, the Spring Festival maintenance plan of downstream polyester factories has been promoted, resulting in a decline in operating rate and weak demand, which has put pressure on the supply and demand side of ethylene glycol.

In the first half of January, the pure polyester yarn and polyester-cotton yarn market rose slightly, driven by the strength of raw materials polyester staple fiber and cotton. In the second half of the month, as the Spring Festival approached, the operating rate of downstream looms decreased significantly. The transaction became weak, and the last week of the Spring Festival was approaching. Transactions are sparse. Textile enterprises and traders in Henan, Shandong, Jiangsu and other places have reported that since January 25, most manufacturers have been on holiday, and various light textile markets have also closed. drastically reduced. The mainstream price of 32S in Shengze market is around 12700-12800 CNY/ton, and the mainstream price of 50S is 14200-14400 CNY/ton;

3. Market outlook forecast

In the short term, in terms of raw materials, the price of international crude oil is easy to rise and difficult to fall due to factors such as geopolitics in Russia, Ukraine, and energy tension in Europe, and the cost side of staple fiber has strong support. In terms of supply, after the festival, the staple fiber will resume operation or run at a high level. In terms of demand, the resumption of work of downstream spinning mills and weaving enterprises may be similar to previous years. On the whole, with the support of the cost side, it is expected that the staple fiber market will continue to fluctuate upwards in February. Pay attention to changes in raw material prices and the resumption of upstream and downstream work after the holiday.