The Decline Of Polyester Staple Stems From The Lack Of Confidence.

In June 10th, the direct spinning PET staple ended a wave of decline since mid April. In July 2nd, less than a month ago, the price of direct spun polyester staple fiber increased by 1550 yuan / ton, and the rally was more rapid. But with the good news coming out, the market once again returned to the weak trend, and even many market participants thought that the market or fell to 7500 yuan or fell back to the starting point, and such a pessimistic mentality was attributed to the lack of confidence.

Since July 4th, the price of direct spun polyester staple fiber has dropped from 8650 yuan / ton to 7950 yuan / ton, or 8.09%. At the same time, the factory production and marketing rate continues to be low. With the successive delivery of pre sale orders, the pressure on enterprises to accumulate warehouse is growing.

In fact, although the fundamentals of polyester staple industry are not optimistic, it is still in a relatively balanced state. During the year, the capacity utilization rate of melt direct spinning PET staple fiber was usually maintained at over 80% (capacity utilization rate exceeded 90% for capacity shortage, 79-90% for normal level, less than 79% for excess capacity), and Industry Supply and demand fundamentals remained relatively balanced. Just because of the lack of confidence in the downstream industry, especially the pessimism of the market outlook, it is very prudent to hoard the goods. This will lead to difficulties in the delivery of suppliers, and the middlemen also reduce the amount of stockpiling, so that the final inventory pressure is concentrated in the production process. At this time, even if social inventory is reasonable, enterprises will be forced to reduce prices or even reduce production due to the rise in factory inventories. As shown below, the height of the storehouse is inversely proportional to the price.

The reason for the lack of confidence in downstream is nothing more than a concern about trade risks and doubts about whether the PTA high processing fee can continue to be maintained under the joint production of polyester factories.

In recent years, in addition to the direct impact of tariffs, other countries' frequent anti-dumping strategies on polyester staple fibers in China have intensified the competitive situation of polyester staple fiber exports in China. The complicated and changeable trading environment also has great impact on the orders of the terminal enterprises. Some enterprises are afraid of overbooking because of worrying about the uncertain future situation. Compared with the previous orders in the same period of the previous year, many spinning mills have repeatedly storaged this year, and the pressure of funds is also unbearable. Under the situation of foreign worries and worries, the downstream market generally lacks confidence in the market situation; and the phenomenon of high processing fees of domestic direct raw material PTA is another major factor aggravating the industry's worries. Along with the commissioning of domestic private refinery, the price difference between PX and naphtha has been compressed, but PTA has been at a high level because of the tight supply. The spot processing fee is still at a high level of 2000 yuan / ton recently. According to the processing cost of 600 yuan / ton, the factory profit should be 1300-1400 yuan / ton. However, due to the weakness of the terminal market, polyester factories frequently report the production reduction operation or plan under the pressure of storehouse, and even if the PTA liquidity continues to tighten, the market will not be able to fluctuate. Just as the PTA futures market rose sharply on Thursday, and failed to stimulate the production and marketing of the market, the industry thought that the phenomenon of PTA high processing fee was difficult to sustain. With the increasing production situation of polyester factories and the restart of PTA factories, the industry processing fee would eventually return to a reasonable level.

On the whole, although there has been no significant decline in the downstream operating rate, the weaker market is already exacerbating the psychological conflict among downstream buyers. The increase in staple mill inventory will also continue to suppress market prices, and eventually the enterprises will be forced to cut prices or cut production. Therefore, the lack of confidence has become the number one killer of the market, and in the face of internal and external troubles, market confidence is hard to establish. After the monthly closing period, the market price of polyester staple fiber still has certain downward space.