Crude Oil, Chemical and Fiber Market Week 17

Market this week – W17

Summary: Oil fluctuated largely and fell, PTA and MEG followed to went down, Polyester chip, Polyester filaments and PSF fell, VSF varies.

1,The oil price closed down after a large fluctuation. US crude oil prices appeared negative value on Monday (April 20) for the first time in history: US WTI crude oil May futures plunged 55.9 US dollars, or 305.97%, to close at -37.63 US dollars / barrel. In response to the plunge in oil prices on Monday, a source pointed out that WTI crude oil futures need to be delivered in Cushing City. The slump in oil prices is because traders holding WTI crude oil May futures contracts cannot sell the contracts and there is no space to store the crude oil that should be delivered. This can indicate that all crude oil warehouses in the Cushing area have been booked, the oil storage market is in poor condition, and inventories are close to full capacity, so whether the June WTI crude oil futures contract can avoid a plunge remains a problem. Continued decline in crude oil prices may cause more oil producers to cease operations. If demand cannot increase by mid-May, the WTI crude oil June contract may face the same doom. West Texas Intermediate Crude Oil (WTI) futures prices for June delivery on the New York Mercantile Exchange fell by $ 8.86, or 43.4%, to close at $ 11.57 per barrel. The lowest intraday drop was $ 6.50 per barrel. In June, the volume of WTI crude oil futures exceeded 2 million contracts, a record high for a single day. The growing oversupply has made the oil market’s recovery appear weak. The oil market rebounded in turbulent trading on Wednesday (April 22) and continued the previous day’s gains on Thursday.

2,PTA futures went down to bottomed out again, and spot prices hit a record low. On Monday, the fundamentals of PTA weakened, the Futures prices fell, polyester production and sales were sluggish, and the buying atmosphere was deserted, with only sporadic transactions. In the middle of the week, as PTA futures approached the previous low, the buying slightly increased, spot volume increased, but the average price continued to drop. On Thursday, crude oil rebounded, PTA futures rose sharply, and polyester production and sales rebounded. However, polyester factories have insufficient purchasing enthusiasm due to abundant raw material inventories, and only individual orders was transacted. Despite the recent expansion of delivery warehouse capacity, PTA continues to accumulate, and delivery warehouse capacity continues to be tight. Week’s market atmosphere is general. Because there is no improvement trend in supply and demand, due to the large fluctuation of short-term crude oil, the price of short-term PTA fluctuated up and down around the cost line, and the pressure of mid-to-long-term PTA inventory will still restrict PTA prices.

3,MEG prices fluctuate violently, and the overall trend is greatly affected by the external market. In the first half of the week, MEG prices fell sharply, and the overall market tend to sell. Among them, affected by the May WTI contract closing at a negative value, market sentiment was significantly under pressure, and chemical products were under significant pressure. In the second half of the week, MEG prices were fluctuated in a wide range, and market buying followed up in general. Recently, there have been many changes in MEG equipment. Zhenhai Refinery and Hengli Petrochemical 2 # have temporarily stopped temporarily. In the later stage, installations are alternately performed, and many factories still have maintenance plans, and domestic construction is expected to remain low. In addition, the recent MEG vessels have blocked the port significantly, and the overall storage speed is slow. It is expected that the subsequent port inventory recovery will be relatively slow. Fundamentally, part of the cargo declaration process has been affected due to the port blockage problem, and the supply and demand pattern in May will remain in a broad balance.Short-term MEG prices mainly follow the fluctuations in the external market, but high social stocks are still forming suppression.

4,The market for polyester chips fell weakly, mainly due to the plunge in crude oil. At the beginning of the week, the market mentality deteriorated significantly. The price continued to decline. The price of polyester chips rebounded sharply in the second half of the week, driving the market to buy moderately and the price Stabilized somewhat. Week’s transactions have generally declined, with very little buying in the first half of the week and moderate recovery in the second half of the week, but prices have dropped significantly. The short-term polyester chip market is dominated by weak range shocks

5,The prices of polyester filament yarns in Jiangsu and Zhejiang mainly fell and promoted. From Monday to Thursday, the polyester downstream weaving mill maintained a low operating rate. As the Labor holiday is approaching and there are more shutdown expectations. The inventory of the polyester yarn factory is accelerating, and the willingness to promote is strong. The price is mainly weak and downward, and partially cooperate with the preferential policies of large orders. On Friday, due to the increase in raw materials on Thursday and the partial increase in polyester yarn, the price of polyester yarn increased. The price of polyester yarn in South China has moved down. In the export market, compared with domestic sales, polyester yarn exports are lighter, as foreign epidemics continue, production in most countries and regions has not returned to normal, polyester yarn export orders are scarce, and orders that require delayed delivery in the early stage have no intention to ship. It is expected that there will be a negative probability of export growth this year.

6, Polyester staple fiber continued to decline this week due to falling raw materials and weak demand. For Spunlace 1.4D, After the surge last week, the downstream stocks are generally sufficient to the end of May or even June, so most choose to wait and see. For 2-3D PSF, as the price dropped back to the same price as Spinning 1.4D PSF. The factory currently owes goods to around mid-to-early May. Most signed orders arranged to delivered, while new transactions are rare. As the coarse denier fiber fell back, the low-melting fiber also brought down quickly this week, and the transaction was negotiated. For 1.4D spinning staple fiber, As crude oil and polyester raw materials fell sharply in the first half of this week, the market panic, PSF fell rapidly. In the second half of the week, crude oil and polyester raw materials stopped falling and rebounded. The decline in PSF slowed down. Market transactions were mainly done as rigid demand.

Basically, the spinning fiber is still weak, and spunlace fiber demand is general. The difference between different type fibers in the later period will continue to enlarge, and some coarse-denier factories may choose to switch back to spinning fiber after completing the on-hand orders.

7, After few viscose staple fiber suppliers make attempts to increase price, the overall market kept weakness. The mainstream mid-range viscose staple factory has good production and sales performance for two weeks this month, and their quotations have increased this week. Other factories are generally stable. High-end fiber prices are stable. In terms of market sentiment, the downstream spinning mills usually have shutdown plans during the Labor holiday period, so the procurement status is general. In the middle of the week, rumors of high-end fiber price reductions began to appear. Although these rumors have not been confirmed, they have a significant negative impact on the downstream purchasing attitude. Some spinning mills basically maintain a minimum amount of purchases. The high white VSF continues to remain strong, and the supply of traditional suppliers continues to be tight. Some new suppliers appeared this week. Overhaul of overseas viscose factories has also increased, and the details are still to be officially announced. Some spinning mills in South Asia resumed slowly, but the demand for viscose staple has not yet recovered significantly.

In April, the overall sales were poor, especially for some companies with higher loading ratio. Physical inventories grew faster. With the increase in sales pressure, it is not ruled out that aggressive promotional policies are introduced, and there may be a substantial decline next week.

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