Market this week – W21

Summary: Oil fell, PTA dropped back, MEG went down, Polyester chip weakened, Polyester filament yarn kept promotion weekly, PSF fluctuated, VSF weakly stabilized.


1,Oil prices fluctuated and closed down this week. Crude oil futures prices rose slightly on Monday and recorded their highest closing prices in two years. Despite the epidemic outbreak in parts of Asia, the market is more optimistic about the rebound in fuel demand in the United States and other regions. There were market rumors on Tuesday that Iran’s nuclear talks might make progress, putting pressure on crude oil prices. In the second half of the week, as the Colonial Pipeline’s gasoline supply decreased, the U.S. Gulf Coast gasoline inventory rose to the highest level since August 2020. In addition, the COVID-19 situation in India is still severe, the number of new deaths in a single day has set a record, and the medical system is on the verge of collapse. The weakness of the stock market has led to increased pressure on risk aversion. Crude oil prices continued to fall.


2,PTA rose high and fell, and the atmosphere for market discussions was general. The price of WTI fell from the high point, and the price of PX fell. Although Fuhua reduced the load and some production lines of Yisheng were shut down, few installations recovered during the week and the loading rate increased to 82.6%. At the same time, the high product inventory of polyester factories and the compression of cash flow have gradually increased production cuts, and the supply and demand of PTA have gradually begun to accumulate. However, due to the fact that the spot price during the week was lower than the monthly average price, the buying interest of polyester factories was active, and the spot spot was still tight, and some suppliers repurchased, the basis performance was relatively strong. Under the expectation that the polyester plant will drop negatively, PTA supply and demand are expected to maintain a broad balance.


3,MEG price is wide-ranging, and the market negotiation is acceptable. In the first half of the week, MEG fluctuated upwards under the boost from the cost side. Spot price followed the rise, and selling order increased in the market. Under the adjustment of the commodity market in the middle of the week, MEG was under pressure and the spot transactions were low. As of Friday, the spot performance during the delivery period was tense, traders actively participated in replenishment, and spot prices rebounded. This week, the domestic operating rate of MEG dropped to 65%, and the increase in domestic production during the month was average. In addition, the new arrival of imported goods has been delayed, and the import volume in May is expected to be revised down. The short-term MEG port inventory will continue to operate at a low level. Under the short-term replenishment demand, market buying support is relatively strong, and the spot market is relatively strong.


4,Polyester chips continued to be weak. Crude oil rose sharply and then fell sharply. In addition to the overall weakening of the domestic commodity atmosphere, the cost of polyester fell again. During the week, the polyester market continued to be light, chip prices continued to decline, and factory inventory pressures increased. Partial reduction in production and maintenance may gradually increase, and it is expected that the short-term polyester chips will remain weak and fluctuate in the range.


5,Polyester filament yarns in Jiangsu and Zhejiang province are on promotion on Friday. From Monday to Thursday, price of the polyester filament yarn remains stable, and the downstream mills kept wait and see, and the production and sales was light. On Friday, the polyester filament factories promoted and sale turnover increased significantly, the price raised on Saturday. Polyester filaments yarn in South China were also stable from Monday to Thursday, and fell slightly on Friday. In the export market, the export quotation was slightly lowered, and actual transactions were mainly negotiated. The business of domestic factories has remained slack recently, but some large factories are better at receiving orders. As China’s ocean freight rates remain high and are expected to continue to rise, the disadvantages are extremely prominent in the international market. If there is no low price attraction, foreign customers will generally be less willing to purchase, and the subsequent yarn price trend is expected to be weak.


6,Polyester staple fiber futures stopped falling and rebounded in the beginning of this week, the futures basis was strong, the lower market prices gradually rose, and the PSF spot market remained stable. In Mid-week, PSF futures fell sharply again, and spot price quickly followed the decline, and some traditional traders were actively replenishing goods. Then the futures stopped falling and rebounded, low prices disappeared, and market transactions gradually stabilized. The factory is still in a state of stockpiling. Currently, cashing flow of PSF is in low level, there is not much room for polyester to decline. Shortly, PSF will follow the trend of crude oil and polyester raw materials.


7,Viscose staple fiber kept stable, but the popularity has dropped sharply. The quotations of high-end fibers are stable, but due to generally good selling last week, most factories will mainly implement pre-orders this week. The market heard the news of large orders and low-price transactions from the imported far futures source. It has a great impact on the spot market. Downstream overall bearish expectations have strengthened, new transactions have decreased. In the export market, overseas demand has been weak recently, and there are few transaction. Market confidence is generally sluggish. Viscose factories are under certain pressure, and some companies with better pre-sales still have a certain degree of resilience, but companies with higher inventories may lower their prices in short time.