Market trend week 22- Oil PTA MEG PET PSF VSF

Market this week – W22

Summary: Oil rose, PTA fluctuated and rose, MEG kept strongly, Polyester chip fluctuated, Polyester filament yarn kept promotion weekly, PSF fluctuated, VSF plummeted.

1,Oil prices have risen for four consecutive times this week. Vaccination programs in Europe and the United States will allow more people to travel, and investors remain optimistic about the recovery of fuel demand this summer. The two major crude oil futures rebounded on Monday from last week’s decline. On Tuesday, crude oil closed higher. API said that US crude oil inventories decreased in the past week and the approaching northern hemisphere’s summer driving season boosted oil prices. On Wednesday, the two major crude oil futures continued their gains this week. The impact of the hacking of the oil pipeline company Colonial Pipeline continues, and the operating rate of the US East Coast refinery has reached its highest level since June 2019. With the exception of the Rocky Mountains and the West Coast, the volume of oil processing in other regions increased last week. Oil prices continued to rise on Thursday, as the progress made in the reopening of the European and US economies offset the impact of weak Indian demand on the oil market. JPMorgan Chase raised its forecast for the average price of U.S. oil and Bursa oil in 2021. According to a new document from the US Department of Justice, the Biden administration stated that it will continue to support ConocoPhillips’ oil projects in the Alaska National Petroleum Reserve.

2,PTA market fluctuated and rose. Crude oil prices remained strong and fluctuated, which provided significant support at the cost side. At the beginning of the week, mainstream suppliers significantly reduced the supply of June contracts, coupled with the fact that the spot price was lower than the monthly average price, the market buying momentum increased, and the spot basis strengthened. From the perspective of supply and demand, in June, Hengli, Honggang and other equipment have maintenance plans, and the commissioning of new equipment has been delayed. Supply and demand are expected to be de-stocked. In mid-week, under the expectation of tight spot liquidity, the basis will continue to maintain a strong. With the increase in PTA prices, the purchasing enthusiasm of polyester factories has gradually declined, and the buying momentum has fallen. On Friday, polyester production and sales increased, and the enthusiasm for purchasing raw materials was still relatively general.  At present, the performance of the crude oil side is relatively strong, and there is still some support on the cost side. From the perspective of supply and demand, the overhaul in June has gradually become clear, and the supply and demand are deviating from expectations. With the contraction of suppliers, the decline in basis may be limited, and short-term PTA prices are still supported.

3,MEG maintains strong volatility. On Monday, MEG prices rose slightly and fell back, and market negotiations were fair. On Tuesday, MEG prices fell and the spot basis weakened significantly. On Wednesday, MEG prices rose sharply, and market transactions were active. On Thursday, MEG prices fluctuated and firmed, and the market was still buying. The MEG market is still in the long-short game, and the mid-to-long-term new equipment put into production is obviously suppressed. However, the overall supply of overseas markets is still tight at the moment. Although import arrivals in early June can show a short-term concentration, it is still difficult to see an effective long-term recovery. At the same time, the near-end port inventory is still at a low level. Although supply and demand entered the accumulating channel in June, the actual range still needs to be determined by the output of new devices. The short-term MEG market is relatively strong.

4,Polyester chips fluctuated within a narrow range. Driven by the sharp rise in crude oil, the cost of polyester rose during the week, and the low price of chips rose slightly. However, the terminal demand was weak, and the willingness to buy in the market was limited, and downstream low-level purchases were the main focus. This week, polyester chips sales turnover is general, with low-level buyers just in need. Crude oil has risen again, and the short-term polyester cost support has strengthened. However, under the influence of the recent macroeconomic perspective, the raw material end has also fluctuated greatly, while the terminal demand is still weak. The inventory pressure of polyester factories is high, and the market purchase mentality is cautious. It is expected that short-term polyester chip maintains a range of oscillations.

5,Polyester filament yarns in Jiangsu and Zhejiang are still on promotion on Friday, which discount is larger than the previous few times. In the last week of May, from Monday to Thursday, the polyester filament factory remained stable, with low production and sales; the polyester filament factory concentrated on promotion on Friday. South China polyester filament remained stable from Monday to Thursday, and price of few specifications fell. In the export market, export quotations were slightly lowered, and actual transaction prices were mainly negotiated. In near future, except for some large factories that are still selling at low prices and with good sale turnover, other factories sales was not good. The main reason is that there are certain differences in prices between factories quotation and the target price of foreign customers due to different outlook of the markets, which makes it more difficult to negotiate orders. At present, the inventory pressure of polyester filaments is still prominent, and the overall price of filaments is expected to be weak in the short term.

6,Polyester staple fiber continues to maintain a range consolidation, sales are still light, and inventories are accumulating. In the first half of the week, PSF futures fluctuates and rises, factory prices are stable, basis between futures price and spot price are strong, and low market prices are gradually rising. In the second half of the week, PSF futures fell again, spot price followed the decline, and the futures basis weakened. On Friday, futures pulled up, and the low level rose slightly. Some factories announced their overhaul plans in June. PSF cash flow continues to be compressed. The current staple fiber price is approaching the cost line. If production cuts are increased or implemented, supply and demand in June are expected to change.

7,Viscose staple fiber prices fell sharply. The market was relatively stable in the first half of the week, with no significant adjustments from the factories. But in the second half of the week, news of low prices from major manufacturers increased, and some price policies became clear on Friday. The lower prices of major manufacturers are based on the previous cooperation, high-end fiber plummeted by RMB 1,200/Ton to around RMB 13,000/ton. Other factories said they followed the decline, but the specific pricing is unclear. Market price is chaotic. Individually higher quotations are at 13,800 yuan/ton, and the weekend market is more difficult to describe. The export market is also relatively difficult at present. Compared with the international market prices of India and Indonesia, domestic companies have difficulty in following up. With the introduction of high-end manufacturers’ prices, other factories are under greater pressure to lower their prices, but it remains to be seen what price levels will fall next week.