This week, the raw material end Fuhai Chuang basically implemented maintenance, the polyester short fiber market fundamentals are still acceptable, the short-term price is still relatively low, but the spot processing interval continues to be above 2000 yuan, coupled with the weakening of polyester demand and other factors. The industry feels that the risk in the market is increasing. Therefore, in the short term, the price of polyester staple fiber may temporarily hold a stable and wait-and-see trend, and there may be a certain downside risk in the medium and long term.

Cost support begins to weaken

Recently, due to the surge in international oil prices, the improvement in demand for polyester products, the depletion of PTA supply, the favorable cost support and the increase in the external market, the short-term trend of PTA has shown a strong rise. After two consecutive daily limit, the long-term funds also began to sell, further suppressing the trend. On July 4, near midday, PTA's main 1909 contract plummeted and hit a daily limit. In the short term, PTA will maintain a high level of volatility.

In terms of ethylene glycol, it is impossible to find strong and favorable support at the macro level in the short term. At the same time, some equipments are restarted after the overhaul, and the pressure at the ethylene glycol supply end increases again, and the demand end support is difficult to function effectively. Therefore, it is expected that the short-term ethylene glycol spot market will continue to fluctuate at a low level. In general, the cost side has weakened in the early stage.

Low profit, increased work

From the perspective of polyester yarn profit, from January to June, the average profit of the domestic direct-spinning polyester staple fiber industry was 34.92 yuan/ton, up 40.97% from the previous month and down 27.58% from the same period last year. In the first half of 2019, the average profit of the industry remained good. However, the commissioning of private large-scale refining and chemical projects failed to allow PX's profits to be smoothly transmitted to the downstream. However, due to the tight supply of PTA, its profits continued to be high. At the end of the second quarter, polyester The short-selling industry's profit has been compressed to a very low level. The average industry profit in June was only 54.54 yuan / ton.

From the supply side, as of July 3, the polyester staple fiber operating rate was 82.62%, and the follow-up factory maintenance equipment will resume construction. In addition, a new polyester unit will be added in June, and the supply pressure still needs attention.

Downstream demand is hard to pick up

This week, the international trade relationship once again showed a tendency to ease, which led to an increase in foreign trade orders for pure polyester yarns, which made the pressure on pure polyester yarn stocks better. Considering the downstream resistance to price increases, the price of pure polyester yarns may be limited. Let's take a look at the grey cloth market. In the short term, the inventory is still high, or it is difficult to improve. Some autumn orders will drive inventory changes. At present, the impact is limited. The fluctuation of upstream prices has little effect on the grey cloth.

In summary, July is still a traditional off-season, and terminal demand is difficult to increase significantly. At this stage, under the support of raw materials, some factories are oversold and the inventory pressure is greatly reduced. Therefore, it is expected that the trend of polyester staple fiber will tend to be flat in the short term, with a focus on downstream demand.

Hai'an County Qinfeng Chemical Fiber Co., Ltd. relies on the professional power of single stream, the front-end quality inspection system and perfect quality inspection system ranks among the high-quality enterprise queues in the industry, specializing in the production of short pp, polypropylene staple fiber, polyester staple fiber and Functional polypropylene staple fiber, etc.