Market this week – W28

Summary: Oil closed down, PTA fell after rising, MEG oscillated upward, Polyester chip rose and fell, Polyester filament yarn stabilized after rising, PSF rushed high and dropped, VSF increased.


1,Oil prices closed down this week. On Monday, OPEC+ failed to break the deadlock within the organization for the third consecutive trading day, which increased the risk that its inaction could lead to a spike in oil prices and stimulate inflation. The differences within OPEC have brought two completely different possibilities to the oil market, which makes the trend of crude oil futures prices elusive. On Tuesday, as the OPEC+ negotiations fell into a crisis, the market was confused about the organization’s next move, and the two major crude oil futures retreated sharply that day. On Wednesday, there were reports that the UAE proposed to sell as much crude oil as possible before demand dries up. Officials familiar with the matter said that the UAE’s strategy is one of the most significant changes in the oil policy of the major oil countries in the Middle East. Due to the uncertainty caused by the OPEC+ deadlock and concerns about the rapid spread of the COVID-19 variants, the market was under pressure, and oil prices fell for the third consecutive trading day. On Thursday, the two major crude oil futures both rebounded after the U.S. Department of Energy Information Administration released its weekly report.


2,PTA prices rose first and then fell. At the beginning of the week, WTI futures prices hit a new high. In the middle of the week, crude oil plummeted. PX also plummeted. However, PX prices rebounded sharply on Friday, and PTA processing fees quickly compressed. At the beginning of the week, due to the shutdown of individual installations, the supply of PTA was tight in some parts, traders were reluctant to sell, and the basis was rapidly rising. In the middle of the week, crude oil fell and the new device went into production smoothly. In the short term, under the tight balance in July, PTA inventory pressure is not great. However, with the launch of Yisheng’s new equipment and the restoration of Dushan Energy’s second phase as scheduled, the tight situation in the Zhapu/Ningbo area has been eased to a certain extent, and the regional market may be difficult to reproduce. In the short term, PTA will follow the fluctuations on the cost side.


3,MEG oscillated upward. On Monday, MEG prices were firm at a high level, and transactions were average. On Tuesday, MEG prices opened higher and then fell slightly. On Wednesday, MEG prices fell sharply and transactions were good. On Thursday, MEG prices were weakened and the overall buying momentum was generally following. Crude oil recorded its biggest decline in seven weeks, and the commodity market was under significant pressure. In July, the MEG supply and demand pattern maintained a loose balance. Starting from the middle of the month, domestic supply has gradually increased, and the demand side support is still good. It is expected that the short-term MEG market will fall and the consolidation will be the focus.


4,Polyester chips rose and fell. Affected by the large fluctuations in crude oil, the market performance first rose and then declined. As crude oil continued to hit new highs, the PTA continued its upward trend at the beginning of the week. Driven by costs, the price of chips rose the second half of week,crude oil dropped overnight and TA futures fell from their high points, the quotations of polyester chip factories remained stable. However, traders dumped goods at low prices and the market dropped significantly. At present, there are more stocks in the downstream, market buying has fallen sharply, and factory inventory pressure is not large. It is expected that the short-term polyester chip range will be weak and fluctuating.


5,Polyester filament yarn in Jiangsu and Zhejiang remained stable after rising. In the atmosphere of rising raw materials from last week, polyester yarns were largely destocked and lasted until the first half of this week. From last Friday to this Tuesday, polyester yarns were still in the atmosphere of destocking; but starting on Wednesday, the crude oil prices fell sharply overnight. Affected by the atmosphere, the purchasing atmosphere of polyester filament terminals has broken, and production and sales have entered a light period. However, polyester filament factories are atd a low inventory level, and prices remain stable. South China polyester yarns rose too and stabilized in the second half of the week. In the export market, the export quotations of polyester filaments continued to rise sharply, but the overall export orders were not as good as last week. On the one hand, due to the excessive rise of the yarn prices, foreign customers need time to adapt. On the other hand, the sharp drop in crude oil affected the market mentality. From the current point of view, although crude oil has been adjusted in stages, the overall upward trend has not changed, and the current polyester yarn inventory pressure is not great, and the short-term forecast is mainly stable.


6,Polyester staple fiber rushed higher and fell. From the end of last week to the beginning of this week, due to higher crude oil and polyester raw materials, PSF transactions increased in volume and prices rose. With the drop in oil prices, polyester raw materials and PSF futures callback, the spot market transactions shrank, factories moderately followed the decline. The crude oil and polyester raw materials market fluctuates sharply, which has intensified the wait-and-see attitude of the market, and the downstream raw materials are sufficient. The PSF is expected to remain consolidating and volatile in the short term.


7,Viscose staple fiber quotation tried to increase, and the transaction price increased. The quotations of high-end fibers rose, and the transaction prices rose accordingly. Mid-range fiber prices also generally rose on Monday, and transactions tended to firm. The export market is still dominated by South Asia this week. After the phased sales of viscose staple fiber improved, the downward pressure temporarily eased, and the peak season began one after another in August. Market expectations are improving, and prices are expected to rise easily but never fall.