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Staple fiber continues to rise or is limited
2023/7/28
Since the end of June, the staple fiber market has continued to rise under the support of a rebound in oil prices at the cost end. However, judging from the basics of staple fiber supply and demand, the market is expected to weaken further, and the good news of further production cuts by oil-producing countries has been basically reflected in oil prices. The market lacks new positive driving factors for the time being. It is expected that the staple fiber market will further rise. limited.
Crude oil at the cost side has strong support in the near future. As Saudi Arabia said it would extend its voluntary production cuts until the end of August, Russia announced a voluntary reduction in exports by 500,000 barrels per day in August, and the supply is expected to shrink, boosting oil prices to rebound higher, providing strong support for downstream petrochemical products, and most chemicals followed suit. Purified terephthalic acid (PTA) and ethylene glycol, the direct upstream raw materials of short fiber, are currently in a strong supply and demand pattern.
From the perspective of raw materials, in terms of PTA, since the end of June, the burden of equipment maintenance has been reduced more, and PTA is currently in the stage of slight destocking. However, the Hengli plant has been put into production recently, and the plants will restart in late July. It is expected that the inventory will change from destocking to small accumulation. However, considering the low level of processing fees, the price trend of PTA will follow the fluctuation of the cost side. In terms of ethylene glycol, after the centralized restart of several large-scale installations at the end of June, the supply rebounded rapidly, and the inventory accumulated slightly. However, Zhongke Refining & Chemical has recently shut down for maintenance. From late July to August, Yulin Chemical’s three production lines totaling 1.8 million tons per year are planned to be inspected. The inventory of ethylene glycol is expected to turn from a slight accumulation to a basic balance or a slightly tight balance. , the price is expected to fluctuate mainly at a low level.
From the perspective of the supply side, the operating rate of staple fiber is at a low level over the years, but the supply is gradually recovering. After the intensive maintenance of the previous installations and the obvious restoration of the processing costs of the installations, the willingness of the staple fiber factories to raise their burdens gradually picked up. Judging from the staple fiber production data, the supply is on the rise. The staple fiber output in June was 610,100 tons, an increase of 5.32% month-on-month and a year-on-year increase of 9.77%. The cumulative output from January to June was 3.4643 million tons, an increase of 5.87% year-on-year. The increase in staple fiber output is mainly due to the fact that new devices have been put into operation in recent years, and the production base has been raised. Even though the start-up load has been at a low level over the years, the output has also increased. In addition, since the 300,000-ton/year staple fiber plant of Suqian Yida was put into operation in the first half of this year, and new staple fiber plants such as Yizheng Chemical Fiber, Sichuan Jixing, and Zhuhai Fuweier are planned to be put into operation in the second half of the year, it is expected that the production capacity and output of staple fiber are expected to rise further.
From the demand side, the downstream chill is gradually showing. The operating rate of spinning mills fell slightly and weakened, and spinning mills are currently facing the accumulation of finished product inventory and insufficient new orders, resulting in further compression of processing fees. Considering that many regions are currently facing high temperature weather, it is not ruled out that there will be high temperature and power restriction measures introduced in the later period, and the current seasonal off-season is superimposed, and the start of downstream spinning mills is expected to further weaken. In terms of terminal weaving, we are currently facing a situation of declining order days and accumulated inventory of finished products. However, under the expectation of good demand in the second half of the year, loom factories have started to maintain stable operation.
Crude oil at the cost side has strong support in the near future. As Saudi Arabia said it would extend its voluntary production cuts until the end of August, Russia announced a voluntary reduction in exports by 500,000 barrels per day in August, and the supply is expected to shrink, boosting oil prices to rebound higher, providing strong support for downstream petrochemical products, and most chemicals followed suit. Purified terephthalic acid (PTA) and ethylene glycol, the direct upstream raw materials of short fiber, are currently in a strong supply and demand pattern.
From the perspective of raw materials, in terms of PTA, since the end of June, the burden of equipment maintenance has been reduced more, and PTA is currently in the stage of slight destocking. However, the Hengli plant has been put into production recently, and the plants will restart in late July. It is expected that the inventory will change from destocking to small accumulation. However, considering the low level of processing fees, the price trend of PTA will follow the fluctuation of the cost side. In terms of ethylene glycol, after the centralized restart of several large-scale installations at the end of June, the supply rebounded rapidly, and the inventory accumulated slightly. However, Zhongke Refining & Chemical has recently shut down for maintenance. From late July to August, Yulin Chemical’s three production lines totaling 1.8 million tons per year are planned to be inspected. The inventory of ethylene glycol is expected to turn from a slight accumulation to a basic balance or a slightly tight balance. , the price is expected to fluctuate mainly at a low level.
From the perspective of the supply side, the operating rate of staple fiber is at a low level over the years, but the supply is gradually recovering. After the intensive maintenance of the previous installations and the obvious restoration of the processing costs of the installations, the willingness of the staple fiber factories to raise their burdens gradually picked up. Judging from the staple fiber production data, the supply is on the rise. The staple fiber output in June was 610,100 tons, an increase of 5.32% month-on-month and a year-on-year increase of 9.77%. The cumulative output from January to June was 3.4643 million tons, an increase of 5.87% year-on-year. The increase in staple fiber output is mainly due to the fact that new devices have been put into operation in recent years, and the production base has been raised. Even though the start-up load has been at a low level over the years, the output has also increased. In addition, since the 300,000-ton/year staple fiber plant of Suqian Yida was put into operation in the first half of this year, and new staple fiber plants such as Yizheng Chemical Fiber, Sichuan Jixing, and Zhuhai Fuweier are planned to be put into operation in the second half of the year, it is expected that the production capacity and output of staple fiber are expected to rise further.
From the demand side, the downstream chill is gradually showing. The operating rate of spinning mills fell slightly and weakened, and spinning mills are currently facing the accumulation of finished product inventory and insufficient new orders, resulting in further compression of processing fees. Considering that many regions are currently facing high temperature weather, it is not ruled out that there will be high temperature and power restriction measures introduced in the later period, and the current seasonal off-season is superimposed, and the start of downstream spinning mills is expected to further weaken. In terms of terminal weaving, we are currently facing a situation of declining order days and accumulated inventory of finished products. However, under the expectation of good demand in the second half of the year, loom factories have started to maintain stable operation.
On the whole, the staple fiber is expected to weaken, which will be negative for the price.
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