Market this week – W27

Summary: Oil hit new high, PTA rushed and dropped slightly, MEG moved upward, Polyester chip rose, Polyester filament yarn increased, PSF fluctuated, VSF declined slightly.


1,Oil prices continued to rise this week. OPEC+ may increase production by 500,000-1 million barrels per day from August, and Iran will stage a strike of oil workers. On Monday, the two major crude oil futures both closed down. On Tuesday, the Delta mutant COVID-19 strain continued to spread, the OPEC ministerial meeting was about to start, and the two major crude oil futures were close to flat. On Wednesday, OPEC+ may discuss extending the oil production agreement until after April 2022, and EIA crude oil inventories have continued to fall to the low point before the epidemic, and U.S. WTI oil has achieved the largest half-year increase since 2009. On Thursday, the OPEC+ Committee recommended gradually increasing oil production for the rest of this year. The United Nations urged the United States to lift sanctions on Irans oil before it was too late. U.S. WTI oil hit its highest level in three years.


2,PTA price dropped slightly after rushing higher. WTI crude oil prices hit new highs, and the cost side continues to remain strong. At present, the PTA processing fee is acceptable, and the maintenance of some devices has not been determined. The profit of the polyester plant is compressed but the inventory transfer is smooth, the polyester loading rate is maintained at a high level, and the pressure on supply and demand is limited. In addition, mainstream suppliers have reduced their contracted supply in July to 50%, and traders have a clear attitude of reluctance to sell, but the sentiment of replenishment of polyester factories in some areas has a strong basis. It is expected that PTA will maintain strong fluctuations following the cost side in the short term.


3,MEG price maintains volatility upward. On Monday, MEG prices were adjusted broadly, and market discussions were general. On Tuesday, the MEG market consolidated within a narrow range, and overall trading was average. On Wednesday, MEG prices fluctuated and fell, and market discussions were general. On Thursday, MEG prices were in a narrow range, and the market was trading in general. This week, the domestic operating rate can rise to above 66%. In the short term, the MEG market will follow the cost side.


4,Polyester chips consolidates slightly. Crude oil remained strong, polyester raw materials surged, and   quotations were raised. This week, the sales of polyester chips were average, and the low-end buying momentum in the market was acceptable, but the willingness to catch up with high quotation was limited. The short-term polyester cost end support is strong, the inventory pressure of the chip factory has eased, and the low price is supported. It is expected that the polyester chip range will fluctuate strongly in the short term.


5,Polyester filament yarn inventory in Jiangsu and Zhejiang has decreased and the price has risen. Since polyester yarns were destocked last week and this Monday, the inventory pressure has been greatly eased. Among them, POY has entered a neutral low state. The continuous rise of crude oil and the increase in terminal operations have given polyester yarn factories a certain degree of confidence. Prices have risen.

South China polyester yarns rose slightly from last Friday, and destocking also occurred. In the export market, with the pushing of increased costs, the export quotations have risen sharply, and transaction prices have also moved up. This week’s export orders have improved, among which Bangladesh’s orders are generally better, and the other regions have also increased in just-needed purchases. It is expected that the price of polyester yarn is likely to rise but not fall in the short term.


6,Polyester staple fiber dropped moderately, transactions were average, and cash flow was near the cost line. After the concentrated replenishment of positions last week, under the volatile adjustment trend of crude oil and polyester raw materials, the PSF was weakly adjusted, the futures basis was maintained, and the mainstream transaction prices were slightly lowered. In the second half of week, PSF futures rebounded,  and spot prices rose slightly. The raw materials are strong, and PSF has short-term cost support, but the rise also lacks continuous driving force. The short-term market maintains a wait-and-see trend of digestion.


7,Viscose staple fiber declined slightly, and the transaction continued to be deserted. The quotations of the two high-end factories were stable, and the actual execution was generally stable, and the prices of goods from traders were slightly lower. The mid-range fiber has a more obvious decline, and there are lower rumors in some parts. Trader prices also followed the decline, and the overall transaction volume was limited. The downstream vortex spinning rose slightly, but it has not been able to significantly boost VSF. In the export market, there are still some inquiries in South Asia, and some export markets are recovering well. However, the overall situation is far from recovering, and some ocean shipping is affected by extremely high ocean freight and has not yet returned to normal. It is expected that the short-term price will be mainly stable, and some small factories may decline slightly in order to compete for market share.