Market this week – W32

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


1,Oil prices fluctuated and closed down this week. The rebound of the epidemic has offset the positive impact of the recovery in global demand. At the same time, Saudi Arabia, Kuwait and the United Arab Emirates increased their crude oil exports to a few-month high last month. The two major crude oil futures both plummeted on Monday, the biggest decline in a week. Due to the increase in Delta variant virus infection cases in many countries in the Asian region, causing market concerns, the two major crude oil futures prices continued to fluctuate on Tuesday. The two major crude oils continued to fall on Wednesday, as the recovery momentum of global air transportation fell for the second consecutive week, which to a certain extent confirmed the anxiety of the market. Oil prices both rebounded on Thursday.


2,PTA fell. As crude oil plummeted, PTA followed the downward trend. The enthusiasm for low-price purchases is better. From the perspective of supply and demand, equipment maintenance was concentrated in early August, and supply and demand remained de-stocked. However, due to the impact of the recent epidemic, some polyester factories fell slightly, the market mentality was suppressed, and crude oil prices weakened, and short-term fluctuations are expected to be weak.


3,MEG rushed higher and fell back. At the beginning of the week, MEG prices followed the downward trend of raw material prices. In the middle of the week, due to the ban on berthing in Zhangjiagang and the shutdown of Zhejiang Petrochemical’s atmospheric and vacuum equipment, traders are actively replenishing goods. In August, the MEG supply and demand pattern shifted to a small accumulation of warehouses, which was significantly affected by the delayed cargo warehousing at the end of July. Domestic coal-based MEG plants are gradually recovering, and the start of China’s coal-based production in August can rise to more than 50%. Starting from mid-August, spot replenishment from domestic sources and imports will be realized one after another. However, the recent temporary shutdown of overseas installations has significantly boosted market confidence. Some traders on the market are actively replenishing goods. It is expected that the MEG market will be strong.


4,Polyester chips rose and fell. At the beginning of the week, the chip price hit a new high, but the demand side was obviously weak, and high-level buying in the market was scarce. In the second half of the week, as crude oil continued to plummet and polyester raw materials fluctuated widely, the chip market was selling at low prices by some traders, and transaction prices gradually fell. Polyester raw materials tend to fluctuate at a high level, but the demand side follow-up momentum is obviously insufficient, and the chip processing fee continues to be low. It is expected that the short-term polyester chip price will maintain a fluctuating trend.


5,Polyester filament yarn in Jiangsu and Zhejiang promoted. At the beginning of the week, as raw materials fell, terminal operations weakened. On Wednesday afternoon, the polyester filament factory started to promote sales under the expectation of the accumulated inventory, trying to exchange price for quantity, and the production and sales increased significantly; on Thursday, the polyester filament factory’s quotation was revised back. The South China polyester filament factory remains stable as a whole. In the export market, the export quotations were basically the same as the previous period, with minor adjustments sporadically. The overall export orders remained weak. On the one hand, the epidemic in Southeast Asia was severe, and Europe was in the summer holiday, and market demand was significantly declining; on the other hand, ocean freight was high, and the ocean freight rate even accounted for 50% of the value of the goods, and most of them were in a state of loss. Foreign customers have very low purchasing intentions, and it is difficult to improve the short-term export market.


6,Polyester staple fiber fluctuated and weakened, cash flow losses improved, and loading rate dropped slightly. Affected by the decline in crude oil and polyester raw materials, PSF futures fell, and the spot market gradually followed the decline. As raw materials fell more than staple fiber, PSF cash flow losses decreased. Affected by the epidemic, logistics in the Yizheng area was affected, causing factories in the area to reduce production. This week, PSF low-priced transactions were more active, showing that the low market demand is acceptable. The physical inventory of staple fiber factories is tight, especially the Jiangsu factory, and cash flow has improved recently.


7,Viscose staple fiber price was generally stable and the rate of increase slowed down. Some of the high quotations in the early period were slightly loosed. Traders’ willingness to sell has also increased, with prices slightly lower than market prices. However, the downstream spinning mills are not enthusiastic about purchasing, and often perform the previous contracts normally. The local epidemic has a certain impact on logistics, but it has not yet affected the load of the VSF factory. The export market was good this week, and orders from some overseas regions increased. Due to the rebound of the epidemic, it is difficult for mid-range fibers to perform well in the short term, and mid-range fibers may be discounted next week. On the high-end side, low prices are expected to remain stable.