Fundamentals Can Also Be Used For Polyester Staple Fibers Or For Downside Risks.

This week, the raw materials of fuhahaitang were basically implemented, and the market of polyester staple fiber was basically acceptable. Short term price remained relatively low under the support of cost. However, the spot processing area remained at a high level of more than 2000 yuan, coupled with the weakening of polyester demand and other factors. The industry felt more and more risk in the post market. Therefore, in the short term, the price of polyester staple fiber or the trend of stable wait-and-see for a short period of time, there is a certain risk of decline in the medium or long term.

Cost support begins to weaken

Recently, due to the surge in international oil prices, polyester link demand improvement, PTA supply to the Treasury, cost support positive and external market factors such as overweight, so that the short-term trend of PTA showed a strong rise. After a series of two trading boards, the bull capital also began to sell, further pressing down the trend. In the afternoon of July 4th, PTA's main 1909 contract plummeted and touched down. In the short term, PTA will maintain a high and volatile trend.

In terms of ethylene glycol, we can not find a strong support at the macro level in the short term. At the same time, part of the device maintenance started to restart, glycol supply side pressure increased again, demand side support is difficult to play an effective role. Therefore, it is expected that the downward trend of the short-term glycol market will continue. In general, the cost side has weakened in the early stage.

Low profits and increased operation

The profit of polyester filament is 1-6 months. The average profit of domestic direct spinning polyester staple fiber industry is 345.92 yuan / ton, up 40.97%, up 27.58% from the same period. In the first half of 2019, the average profit of the industry was still good. However, the commissioning of private large-scale refinery projects failed to bring PX profits to the downstream. Instead, because of the tight supply of PTA, its profits continued to be high. At the end of the 2 quarter, the polyester staple industry profits were squeezed to a very low level. The average profit of the whole industry in June was only 54.54 yuan / ton.

On the supply side, as of July 3rd, the utilization rate of PET staple fiber is 82.62%, and the following factory maintenance equipment will resume operation, plus a new set of polyester devices in June. The supply pressure still needs attention.

Downstream demand is difficult to pick up

This week, the easing trend of international trade relations has led to an increase in pure polyester yarn foreign orders, making the stock pressure of pure polyester yarn better. Taking into account the resistance of the downstream to the sharp rise in prices, pure polyester yarn has been increasing or limited. Let's take a look at the grey fabric market. Inventory is still relatively high in the short term, or it is difficult to pick up. Some of the autumn orders will drive inventory changes. At present, the impact is limited. The fluctuation of upstream prices has little effect on the grey cloth.

To sum up, July is still the traditional off-season, and terminal demand is difficult to raise substantially. At the present stage, under the support of raw materials, some factories are oversold, and the pressure on inventory has dropped dramatically. Therefore, it is expected that the trend of polyester staple will tend to be gentle in the short term, with a focus on downstream demand. (source: lung Chung, Jin Lianchuang)