According to the Commodity Market Analysis System of Shengyi Society, there was a significant decline in domestic PTA prices this week (October 14-18). The average spot price of PTA in East China was 4912 yuan/ton, a decrease of 5.69% from the beginning of the week. The weakening of cost support and the increase in PTA supply and demand are the main reasons for the price decline.

Looking at the future market, Hengli Huizhou’s 2.5 million ton PTA plant is planned to restart next week, while Zhongtai Petrochemical’s 1.2 million ton plant will shut down on October 6th and is scheduled to restart in early November. At present, the industry’s operating rate is around 85%, and it will continue to operate at a high level in the short term, with ample supply of goods.

In the crude oil market, as of the 17th, the settlement price of the main contract for WTI crude oil futures in the United States was $70.67 per barrel, and the settlement price of the main contract for Brent crude oil futures was $74.45 per barrel. The recent trend of crude oil prices has fallen, and the geopolitical situation in the Middle East is controllable. In addition, the future demand for crude oil market is worrying, which has led to a continuous decline in the oil market; However, the recent decline in US crude oil inventories still provides support for the crude oil market, and overall, crude oil market prices are expected to slightly decrease.

The downstream polyester production rate is around 88%, and the peak consumption season is coming to an end, with limited room for further improvement. With the decline in raw material costs, the terminal market is affected by the mentality of “buying up instead of buying down”, and the purchasing willingness is generally low, resulting in relatively insufficient confidence in the subsequent market. Market atmosphere deviation, maintaining a focus on purchasing in small quantities according to demand. The intensification of supply-demand contradictions further puts pressure on the polyester market.

Business analysts believe that under the dual pressure of cost and supply and demand, the PTA market lacks positive news in the short term, and it is expected that prices may continue to show a weak trend.

According to the Commodity Market Analysis System of Shengyi Society, as of October 17th, the PET factory’s quotation has been lowered, and its average market price has been adjusted to 6350 yuan per ton.

Overnight crude oil prices plummeted, and PET currently lacks cost support, causing a shift in focus. Recently, PTA plant maintenance has been limited, but the overall market supply is sufficient. There is currently no significant release of new orders downstream of the terminal, maintaining normal production and consuming more raw materials for stocking up in the early stage, resulting in weak procurement follow-up. Short term fundamentals are weak and difficult to change, and PTA prices will continue to decline. Due to the drag of raw materials, the quotation of polyester bottle chip factories has been lowered, and the market focus is weak and stable.

Overall, the PET market may experience weak fluctuations in the short term. The actual trend still depends on the trend of the raw material side and the subsequent actual supply and demand situation.

According to the Commodity Market Analysis System of Shengyi Society, the mixed xylene market first rose and then fell in the first half of October. On October 16th, the benchmark price of mixed xylene was 5950 yuan/ton, a decrease of 0.17% from 5960 yuan/ton on October 1st. After the holiday, the mixed xylene market saw an overall rebound, with external and crude oil markets rising during the holiday period, driving the domestic market to make up for the holiday. The mixed xylene market saw a rebound of about 5%. However, the enthusiasm for downstream entry into the market is generally low, lacking downstream support, and the mixed xylene market lacks the driving force to continue rising. Subsequently, with the decline of the external market and the general correction of the domestic market, the market maintains rigid demand trading, and prices continue to decline. Currently, the overall operation is weak.

On the cost side: The international oil price market has risen, and during China’s National Day holiday, international oil prices have significantly increased. On the one hand, the tense geopolitical situation in the Middle East has had an impact, which is good news for international oil prices. On the other hand, the supply of crude oil remains tight. The OPEC+2.2 million barrels per day production reduction before the end of November will still be effective, and some oil producing countries have stated that they will carry out compensatory production cuts. The supply shortage still exists, and the international crude oil price trend is rising. However, concerns about the global economy and demand outlook still exist in the market, coupled with the end of the US oil peak and the increase in US crude oil inventories suppressing the rise in crude oil prices. Overall, the trend of crude oil prices has risen during the cycle. As of October 14th, the settlement price of the main contract for WTI crude oil futures in the United States was $73.83 per barrel. The settlement price of the main Brent crude oil futures contract is $77.46 per barrel.

Supply side: During this cycle, Sinopec’s xylene quotations mostly rose first and then fell. Currently, the company is operating normally, with stable plant production and sales. The company’s quotations remain unchanged from the previous day. As of October 16th, East China Company quoted 5850 yuan/ton, North China Company quoted 5850-5900 yuan/ton, South China Company quoted 5900-6000 yuan/ton, and Central China Company quoted 5700 yuan/ton.

Demand side: The trend of xylene is still weak, and the support on the demand side is weak

On September 23rd, Sinopec Sales Company implemented a price of 7800 yuan/ton for xylene, which remained unchanged from the price on September 16th. The PX price continued to decline both inside and outside the cycle, with CFR China closing at $840-842/ton as of September 20th, a cumulative decrease of $6/ton from $834-836/ton on September 17th.

Market forecast: The crude oil market is expected to operate weakly in the near future, with weak cost support. In terms of supply, the recent accumulation of port inventory in East China has had a bearish impact on the market. On the demand side, the trend of refined oil products is weak, and the purchasing intention is biased towards rigid demand. Overall, the recent bearish impact on the spot market is significant, and it is expected that the xylene market will continue to operate weakly in the short term.

According to the Commodity Market Analysis System of Shengyi Society, after the end of the National Day holiday, the domestic PTA market showed a trend of rising and falling. As of October 15th, the average market price in East China was 5097 yuan/ton, an increase of 3.43% compared to October 7th.

The geopolitical situation has once again become tense, and international crude oil prices have strengthened significantly, providing upward support for PTA costs. In addition, China has announced a series of economic stimulus policies before the holiday, and the commodity market atmosphere is relatively warm. PTA opened high on the first trading day after the holiday. However, downstream polyester factories showed average demand after the holiday, and at the same time, the international crude oil market fell, leading to a decline in PTA prices.

Looking at the future, on the supply side, the current industry operating rate is around 88%, and it will continue to operate at a high level in the short term, with ample supply of goods.

As of October 14th, the settlement price of the main contract for WTI crude oil futures in the United States was $73.83 per barrel, and the settlement price of the main contract for Brent crude oil futures was $77.46 per barrel. The significant decline in international crude oil prices has weakened the cost support for PTA. Currently, geopolitical instability continues to affect the market. The traditional peak season in the United States has ended, and global economic data has performed poorly. OPEC has lowered its global oil demand forecast for the third consecutive month, raising concerns about the demand outlook.

Under the impact of cost decline, downstream polyester products have shown weak performance, with prices of polyester staple fiber producers generally decreasing. The industry supply is relatively sufficient, and some large factories still have high inventory. The signal of peak season in the textile factory has not appeared, so purchasing short fibers or maintaining sporadic rigid demand purchases. The polyester filament factory has lowered prices for shipments, but downstream companies still adopt a wait-and-see attitude, and the market transaction center is weakening. It is expected that the consumption of raw materials purchased by terminal factories in the early stage will reach a low level starting from mid to late October, and the expectation of replenishment for essential needs will to some extent support their prices.

Business analysts believe that on the cost side, with the decline in international crude oil prices, the focus of cost support has shifted downwards. At the same time, PTA plant maintenance has been limited recently, and the overall market supply is sufficient. There is currently no significant release of new orders downstream of the terminal, maintaining normal production and consuming more raw materials for stocking up in the early stage, resulting in weak procurement follow-up. Short term fundamentals are weak and difficult to change, and PTA prices will continue to decline.

Since the National Day holiday, the upstream main raw material for viscose staple fiber dissolution slurry market has remained strong and stable, while the auxiliary material market continues to rise in price. The cost side has performed well, and the on-site supply is tight. At the same time, downstream markets are concentrated in signing orders, and manufacturers are gradually raising prices by 100-200 yuan/ton. Market favorable factors dominate, and the price trend of viscose staple fiber market is upward.

According to the Commodity Market Analysis System of Shengyi Society, as of October 13th, the domestic ex factory price of 1.2D * 38mm adhesive short fiber was 13820 yuan/ton, an increase of 180 yuan/ton or 1.32% from the beginning of the month, and an increase of 7.13% from the beginning of the year.

Cost side support enhancement

The market price of the main raw material dissolution slurry in the upstream is firm and stable. As of now, the price of domestically produced dissolution slurry is around 7800 yuan/ton, the price of broad-leaved slurry in the external market is around 960 US dollars/ton, and the price of coniferous slurry is around 1040 US dollars/ton. The prices of auxiliary materials in the market have both shown an upward trend. As of now, the average price of 32% liquid caustic soda in the domestic market is 917.77 yuan/ton, an increase of 2.51% compared to the beginning of the month; The average market price of 98% sulfuric acid is 331 yuan/ton, with a price increase of 2.16% compared to the beginning of the month. Overall, the upstream main raw material dissolution slurry market has seen a narrow upward trend, while the auxiliary material sulfuric acid market and liquid alkali market have both shown an upward trend. The cost side support for the adhesive short fiber market has strengthened.

Inventory levels are declining

Most of the adhesive short fiber market devices are operating stably, with high market supply and a daily operating rate of around 85.8% in the industry. Due to the increase in downstream demand, the overall inventory level of the adhesive short fiber market continues to decline, and some models in the market are experiencing tight shipments. The supply side still has positive support.

Demand side support is still limited

The trading atmosphere in the downstream cotton yarn market is flat, with prices rising narrowly. As of October 13th, the average factory price of human cotton yarn (30S, ring spun, first-class) is 17700 yuan/ton. Although the demand in the terminal market is still weak, the downstream vortex spinning market equipment continues to increase, and yarn mills are holding onto the demand for essential orders, resulting in an increase in demand for adhesive short fibers. However, the new round of orders in the market is still expected to last for about a month, with limited support from the demand side.

Future forecast

The upstream raw material market prices may continue to show a strong trend, while the on-site supply is tight. Downstream yarn factories are following up as needed, and the market has entered a new round of order delivery period. Many adhesive short fiber manufacturers are queuing up to ship, and coupled with the lack of significant improvement in the end market, it may be difficult for the demand side to improve. Therefore, it is expected that the demand side of adhesive short fiber will perform averagely in the later stage. Business analysts predict that the domestic adhesive short fiber market will maintain stable prices in the short term, with limited price fluctuations, and prices are expected to be between 13700-13900 yuan/ton.