Market trend week 25- Oil PTA MEG PET PSF VSF

TXMC Fiber Machinery

Market this week – W25

Summary: Oil closed up, PTA fell after rising, MEG fell from high, Polyester chip fluctuated, Polyester filament yarn continue to promoted , PSF rose and fell slightly, VSF stabilized with tentative increase.


1,Oil prices fluctuated and closed up this week. Due to the increasing demand for crude oil in the market, and the prospect of Iranian crude oil returning seems more distant than initially expected, on Monday, the two major crude oil futures went up and down in shocks. The latest data released by the American Petroleum Institute shows that as of the week of June 11, US API crude oil inventories fell for the fourth consecutive week, and the decline was the largest since the beginning of this year. Russell Hardy, CEO of Vital, the world’s largest independent oil trader, said that global diesel demand has now returned to its pre-epidemic level, and gasoline demand will return to its pre-epidemic level in the fourth quarter. Petrochemical demand has exceeded the level of 2019. Boosted by multiple positives, the two major crude oil futures rose strongly on Tuesday. Indian fuel sales showed signs of recovery, pushing the US WTI crude oil futures to $73/barrel on Wednesday. The latest data released by the U.S. Energy Information Administration (EIA) on Wednesday showed that U.S. crude oil inventories have fallen for the fourth consecutive week, the largest drop since April. On Thursday, the Fed’s June FOMC resolution was surprised by the hawks overnight. The US dollar index rose to a two-month high on Thursday, putting pressure on US dollar-denominated oil prices, and the two major crude oil futures both closed down.


2,PTA spot prices fell after rising. The main factor for the rise is the rise in the cost side. In terms of PX, the supply is expected to increase, and the growth rate is limited. Two sets of PTA units have restarted this week, but considering that the polyester load has risen steadily, the pressure on supply and demand is not large, and the tightness of local supply sources has eased. On the whole, crude oil is expected to remain volatile, which still supports PTA prices. The polyester load has risen steadily, which also supports demand. It is expected that the short-term PTA will still be dominated by range fluctuations.


3,MEG spot rushed higher and lowered this week. At the beginning of the week, MEG prices opened higher, and market discussions were general. On Wednesday, MEG opened higher and then fluctuated. The market was mainly supported by the upward movement of crude oil, and then the market surpassed and fell. On Thursday, MEG prices fluctuated widely, and market negotiations were fair. At present, MEG cash flow  are below the profit and loss line, and MEG cost support is acceptable under the upward trend of crude oil. Although MEG has entered the accumulated inventory channel, the overall range is limited, and the basic performance is mainly loose and balanced. At the same time, the MEG spot price is lower than the monthly average price, and the demand for replenishment in the low market appears. However, due to the expectation that new devices will be put into production one after another, the price upward will be hindered. It is expected that the short-term MEG market will be dominated by shocks.


4,Polyester chips rose slightly. In the first half of the week, crude oil continued to rise sharply, which led to a rebound in raw materials. The buying of polyester chips rebounded and prices rose from a low level. However, in the second half of the week, as crude oil rose and fell, the market returned to quiet. Crude oil fluctuates strongly, but polyester raw materials are still suppressed by new capacity, short-term cost fluctuations are intensified, terminal demand is still weak, downstream bargain hunting is mainly demanded, and speculative hoarding is limited. It is expected that short-term polyester chips will remain range-bound.


5,Polyester filament yarn in Jiangsu and Zhejiang continue to be sold on weekly promotion after the festival, . During the Dragon Boat Festival holiday, the downstream looms stopped sporadically, and the terminal mainly digested the raw materials prepared before the holiday. The polyester filament factory remained stable for the holiday, and the inventory rebounded again; considering the relatively high inventory and the weakening market outlook, the polyester filament factory again concentrated on promotion sales on Wednesday. However, on the whole, the transaction is basically the same as the pre-holiday promotion; the price rebounded on Thursday; it was stable again on Friday. Markets in South China still hold steady except a rise of Jinlun factory on Thursday. In the export market, export quotations rose slightly, export orders were basically the same as last week, and ocean freight rates continued to remain high. With the exception of some just-needed replenishment, it was still difficult to negotiate orders. The price of polyester yarn is expected to be stable and weak.


6,Polyester staple fiber has risen and fallen, and downstream replenishment have been covered up in stages, and factory inventories have declined slightly. Driven by the rise in crude oil in the first half of the week, PSF futures rose, spot transactions increased, and prices gradually followed up. In the second half of the week, affected by the macro-needs, futures stopped rising and callback, crude oil fell, and PSF spot also appeared preferential concessions. PSF cash flow is compressed to near the cost line. Due to the smooth delivery of goods in the first half of the week, the PSF factory went to the warehouse slightly this week. It is expected that in the short term, PSF will mainly fluctuate in the range following the raw materials.


7,Viscose staple fiber continued to stabilize, and some quotations increased. The two high-end factories maintain higher quotations, and actual operations vary. The quotations of some mid-range fibers are also tentatively rising. Most factories still continue to implement orders signed at the end of last month to the beginning of this month. In the export market, individual factory orders in the export market have increased. At present, viscose staple fiber lacks hot spots, and due to the continuous downturn, the downstream has a risk aversion, and there are situations in which viscose products are avoided locally. Under this circumstance, it is expected that viscose staple fiber will hardly perform well in the short term.