Short fiber will guide the market with cost as the price, and the market will rise first and then fall
2023/9/25
In July, the short fiber market fluctuated and rose. With the continuous rise of the raw material end, the short fiber market as a whole follows the fluctuations of raw materials and commodity futures. In the atmosphere of rising prices, there is a slight replenishment phenomenon in the downstream, and some production and sales have improved. However, overall, the demand of downstream yarn factories has not been substantially improved. After the price rises, the market is more cautious in chasing higher. The guidance of cost on price is obvious, and the absolute price of staple fibers follows the upward trend of cost fluctuations. In August, there was no significant change in the supply and demand side of staple fibers, and prices followed the cost first and then increased, while processing fees increased first and then decreased. Downstream yarn mills are cautious in following up on high prices, and negative demand feedback has reappeared, causing a slight decline in the focus of staple fiber prices. With the relative strength of raw materials such as crude oil and PTA, there is strong support for polyester staple fibers on the cost side, and there is a buying mentality in some downstream areas, which has led to a slight increase in the overall price center in the first half of the week. In September, the polyester staple fiber market was mainly characterized by high volatility. As we entered the peak season of the year, terminal demand gradually improved and improved, coupled with strong support from the raw material end for the staple fiber market mentality, the overall price change was not significant.
In the fourth quarter, although the fourth quarter is often the off-season for global crude oil consumption, major crude oil producing countries continue to reduce production, supporting strong oil prices, and the global economic situation is facing uncertainty. The rebound in US inflation rate has raised expectations for interest rate hikes, and overall, there may still be room for crude oil prices to continue to rise. PTA has loose supply and demand expectations, but processing fees are low and cost is dominant in the market. It is expected that prices will be strong and fluctuate widely under cost support. Ethylene glycol supply and demand remain stable, and supply and demand continue to be loose. With the support of costs, prices are expected to remain weak and volatile.
In terms of short fiber factories, there are still short fiber devices put into operation in the fourth quarter, and the expansion of industry production capacity has brought about an increase in supply. There is currently no maintenance plan introduced, so the overall supply pressure still exists. On the demand side, the number of weaving orders is expected to increase first and then decrease, and the order volume is expected to maintain during the traditional peak season, but space is limited; In December, orders entering the off-season are expected to fall again. The production of yarn and grey fabric is expected to maintain a relatively high overall level. The demand for pure polyester yarn in the "Golden Nine Silver Ten" period is expected to improve, but the extent is limited. Processing costs are expected to remain low, and the start of production is mainly stable. We are still cautious about purchasing short fibers as soon as possible. From November to December, during the off-season, pure polyester yarn products will once again accumulate in stock and demand for staple fibers will weaken.
Overall, in the absence of clear news guidance, the short fiber market will still be guided by cost, with the market initially rising and then falling, with price fluctuations ranging from 6900 to 7900 yuan/ton.
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