Introduction: Affected by demand and cost factors, the price of polyester staple fiber fluctuated widely in the first half of the year. Compared with the same period last year, the price level of short fiber has dropped significantly. As of late June, the average short fiber price in Jiangsu and Zhejiang was 7,201 yuan/ton, down 1.69% month-on-month and 5.82% year-on-year.
Affected by demand and cost factors, polyester staple fiber prices fluctuated widely in the first half of the year.
Data source: Jin Lianchuang
As shown in the figure above, compared with the same period last year, the price level of short fiber has dropped significantly. As of the end of June, the average price of short fiber in Jiangsu and Zhejiang was 7,201 yuan/ton, down 1.69% month-on-month and 5.82% year-on-year. The peak occurred at the end of January, with the price at 7,550 yuan/ton, and the trough occurred at the beginning of January, with the price at 6,900 yuan/ton.
Specifically, in January, the short fiber market first fell and then rose. Due to the impact of the epidemic and the early Spring Festival in 2023, downstream yarn mills have successively reduced production and taken holidays, and the short fiber market price continues to weaken. After the Spring Festival, the staple fiber market has made a good start, and the focus of transactions continues to rise. Entering February, the polyester staple fiber market mainly fluctuated and consolidated. As manufacturers shut down for maintenance during the Spring Festival and gradually restarted after the holiday, the demand for shipments increased due to the large amount of basis traders purchasing before the Spring Festival, resulting in an increase in the overall polyester staple fiber supply and low purchasing intention of yarn mills. However, with the gradual recovery of downstream demand and the strengthening of raw materials, the market has stopped falling and rebounded, and factory inventories have been alleviated to a certain extent. March is the traditional peak season for the industry. However, due to limited domestic and foreign trade orders from downstream yarn mills, demand is difficult to increase. Coupled with the impact of continued low processing fees, some short fiber mills have chosen to reduce production and reduce pressure. Towards the end of the month, driven by the rebound in crude oil, the short fiber market stopped falling and rebounded, and prices accelerated. Entering April, the polyester staple fiber market fluctuated widely. Affected by cost-side support and the intensification of short fiber production cuts, the market adjustment space is limited. In May, the polyester staple fiber equipment that had been reduced in production in the early stage also restarted one after another. The supply is expected to increase, and the demand side has not improved significantly. The polyester staple fiber market has experienced a significant decline. In June, the price of the polyester staple fiber market did not change much from that in May. It was very out of the independent market and mostly followed the adjustment of raw materials.
The market will still be dominated by wide fluctuations in the second half of the year
From the perspective of raw materials: International crude oil prices may fluctuate upward in the second half of 2023. It is expected that the mainstream operating range of WTI will be 70-90 US dollars/barrel, and the mainstream operating range of Brent will be 75-95 US dollars/barrel. In the second half of the year, the commissioning of new PTA equipment is higher than that of the downstream polyester industry. Therefore, the supply of PTA is under greater pressure, and the PTA market trend may remain volatile and weak.
From the supply and demand side: In the second half of the year, new equipment is expected to be put into production in the short fiber industry, and supply pressure still exists. However, the inventory of downstream products is sufficient, and the enthusiasm for starting production is average. It is difficult to significantly increase the stocking volume of short fiber. The inventory is mainly maintained at low levels. There is no obvious improvement in demand, and with the arrival of high temperature weather, the downstream demand performance is weak. The pressure on short fiber stockpiles will also follow in the future. Therefore, short fiber factories will reduce production, and it will take time for the market situation of strong supply and weak demand to ease.
On the whole, the cost pressure on short fiber factories still exists. Affected by high costs and weak demand, short fiber is in a dilemma. The market is difficult to say optimistic. Short fiber factories will mainly maintain low processing fees. In addition, the “Golden Nine and Silver Ten” market in the traditional peak season still needs attention. Affected by this, the short fiber market in the second half of the year may fluctuate widely, making it difficult to get out of the independent market.