Market this week – W20

Summary: Oil closed down, PTA declined, MEG rose sharply, Polyester chip rose and fell, Polyester filament yarn promoted again, PSF weakened, VSF fluctuated greatly.


1,Oil prices fluctuated and closed down this week. At the beginning of the week, the U.S. Energy Information Administration (EIA) raised its expectations for U.S. oil prices in 2021 and 2022 in its latest short-term energy outlook report. As U.S. crude oil supplies declined, OPEC increased its crude oil prices in its monthly report of demand forecast. The two major crude oil futures both closed up on Tuesday. Crude oil futures prices hit their highest closing price since March on Wednesday. The demand outlook in the second half of 2021 is optimistic, and the decline in US crude oil inventories will boost oil prices. Crude oil futures prices closed down on Thursday. Colonial Pipeline resumes the operation of the refined oil pipeline on the east coast of the United States, which is expected to ease the tight supply.


2,PTA decline enlarged. On Friday, the PTA hit limit fell in futures, and the spot price fell. This week, the commodity market has risen and fallen, driving the PTA cost side down, crude oil prices have fallen, and PX prices have fallen. At the same time, PTA supply and demand pressures have increased. On the one hand, the intensive restart of PTA devices is expected, and the supply of PTA in Zhapu, which is tight in the early stage, has also increased, and overall supply is expected to increase. On the other hand, due to the high inventory and the impact of reduced profits, the news of production cuts has increased, and the production cuts are expected to accelerate in the second half of the month. With the decline in prices, the purchasing enthusiasm of polyester factories has increased, and the transaction volume is fair. Due to the short-term decreased cost , the supply of PTA is expected to increase, and the polyester loading rate will fall. It is expected that the short-term PTA will be shocked weakly.


3,MEG prices have risen and fallen, and market negotiation is acceptable. In the first half of the week, crude oil and thermal coal performed strongly, and the cost-side support was obvious. During the substantial upward movement of the commodity market, MEG followed a positive rise, and spot prices rose. In the second half of the week, the price of MEG dropped from a high level, and the black products pulled back sharply, superimposing the impact of the news of production cuts in polyester factories. The MEG market was under significant pressure. As of Friday, MEG prices have been adjusted broadly, and the low market buying momentum is still acceptable. In May, the MEG supply and demand relationship is still in the destocking stage, and the MEG cost side continues to support, and the short-term MEG price is broadly consolidated.


4,Polyester chips rose first and then declined. In the first half of the week, driven by the rising commodity atmosphere, crude oil and polyester raw materials rose strongly, and chip prices rose somewhat. However, in the second half of the week, TA and EG futures fell sharply with the overall decline in commodities, and the market atmosphere was significantly weakened. Transaction prices fell again. The transaction in polyester chips this week was average. Due to inventory and efficiency issues, chip factories have recently experienced more production cuts. It is expected that the price of polyester chips will remain range-bound in the short term.


5,Polyester filament yarns in Jiangsu and Zhejiang are on promotion sale again. From Monday to Wednesday, polyester filament factories will remain stable; on Thursday,Concentrated promotions was proceeded; on Friday, prices returned. Compared with last week’s promotion price, this promotion price is slightly higher than that of last time, while the price of post-spinning DTY is slightly lower than last time. The price of polyester filament in South China remained stable, and rigid demand was the main focus. In the export market, the export quotation has not changed much from the previous period. The actual transaction mainly refers to the current sea freight, and the market transaction is very light. Recently, some overseas regions are still in the holidays, and overall demand has shrunk. In addition, the epidemic situation in India and other regions continues to ferment, international shipping costs continue to rise, and foreign customers are significantly less willing to purchase; factories mainly issue pre-orders, but due to container Shortage, shipments are not smooth. It is expected to continue to focus on sales promotion in May, and the overall polyester yarn prices will not change much.


6,Polyester staple fiber fell weakly. At the beginning of the week, crude oil and polyester raw materials were strongly supported, and after the short-term increase in PSF transactions after the holiday, the factory remained stable and firm. The downstream is waiting and watching at a high position, and the willingness to chase high is not strong, and the overall demand for transactions is mainly. On Tuesday, raw materials weakened, PSF futures moderately followed the decline, and the spot price gradually declined. Driven by the coal surge on Wednesday, EG rose sharply, and PTA and PSF futures in the night trading also rose sharply. Futures purchases were active and transactions improved moderately. In the morning on Thursday, factory discounts were reduced or increased individually, but in the afternoon, EG fell sharply, which dragged down PSF futures. The spot market sentiment quickly cooled. Driven by low futures prices, factories gradually gave preferential benefits. On Friday, polyester raw materials and PSF futures fell sharply, and the spot price quickly followed the decline. In particular, the basis of the futures price remained unchanged, the downstream spot price transactions were active, and the futures transaction volume increased. PSF’s cash flow continued to compress, and factory inventories increased.


7,Viscose staple fiber market fluctuates greatly, the low-price has relatively good high-volume transactions, the high-end brands declines more obviously, and the mid-to-high-end brand price gap has returned to the historical average. Last Sunday, the large order prices of large northern high-end manufacturers dropped sharply, and the local area achieved good production and sales. On Monday, the contract price of high-end factories in the south was adjusted downwards, and the transaction also increased to a certain extent compared with the previous period. Other mid-range companies continue to sign large orders at lower prices. The downstream just needs to be released in a concentrated manner, and most companies have completed the current week’s sales. In the second half of the week, downstream replenishment and order execution were the main tasks, and new order transactions slowed down. In the export market, overseas demand is sluggish. In the face of concentrated transactions in China, overseas buyers’ attention has increased slightly, but the actual conversion rate is not high. The viscose staple fiber is expected to stabilise next week after a periodical increase in volume this week. The long-term trend still largely depends on the speed of demand recovery.