Chinese polyester filament market is generally stable. Most of the factories in Jiangsu and Zhejiang maintained stable quotations, and some factories had a small increase in individual specifications. Mainstream polyester filament factories offer polyester POY (150D/48F) at 7800-8150 yuan/ton, polyester DTY (150D/48F low elastic) at 9300-9500 yuan/ton, polyester FDY (150D/96F) at 8000- 8350 yuan / ton.
Crude oil once again refreshed the high point since October 2014. On January 26, the settlement price of the main US WTI crude oil futures contract was reported at $87.35 per barrel, an increase of $1.75 or 2.04%, and the settlement price of the main Brent crude oil futures contract was reported at $88.74 / barrel, up $1.66 or 1.90%. Brent crude for March rose above $90 for the first time since 2014. Mainly due to rising expectations of tight supply to boost oil prices, tensions between Russia and Ukraine escalated, and the Organization of the Petroleum Exporting Countries (OPEC) increased production less than expected.
The PTA market followed the rise. On January 27, the average spot market price in East China was 5,424 yuan/ton, up 1.92% from the previous trading day and 42.57% year-on-year. The main force of PTA futures 2205 closed at 5496, up 164, or 3.08%. In terms of supply, two sets of PTA units totaling 5.3 million tons in East China announced an overhaul plan at the end of February. In addition, the second phase of Yisheng New Materials’ 3.3 million-ton new capacity unit is scheduled to start commissioning on January 28. The overall supply has increased and inventory has been accumulated. The current operating rate of the PTA industry is around 86%.
During the Spring Festival, the demand side is unlikely to boost the market. Terminal textile enterprises have been shutting down work for the holidays, and the purchase of raw materials has become significantly weaker. Actual transactions are sparse, many factories have been shut down, and the comprehensive operating rate of looms in Jiangsu and Zhejiang has dropped to around 13%. .
Crude oil continues to push up the cost side, but due to the impact of the Spring Festival holiday, the demand is not good, and the price of polyester filament is expected to remain stable in the short term.
Prices were volatile in the beginning of January
Since January, the polyester filament market has maintained a volatile recovery, boosted by favourable cost side. According to the price monitoring of the business society, as of January 15, the price of polyester POY (150D/48F) in mainstream polyester filament factories in Jiangsu and Zhejiang was 7300-7700 yuan/ton, and the price of polyester DTY (150D/48F low elasticity) was 9100-9350 yuan. / ton, polyester FDY (150D/96F) quoted at 7700-8200 yuan / ton.
It is understood that the current overall polyester market inventory is concentrated in 16-26 days, of which POY inventory is 16-19 days, FDY inventory is around 16-17 days, and DTY inventory is around 17-25 days.
Market participants generally expect that the mutated virus Omicron will have a limited impact on the global economic recovery, but oil supply is still tight, and investors believe that the Federal Reserve is not as hawkish as expected, supporting a rebound in oil prices.
Since January, the domestic PTA price has maintained an upward trend. As of January 15, the average domestic PTA market price was 5,213 yuan/ton, an increase of 5.04% from the beginning of the month and a year-on-year increase of 33.68%. In January, the maintenance of domestic PTA plants has increased. As of now, the industry has started at around 77%, down about 3 percentage points from the beginning of the month. However, Yisheng Dalian and Hailun petrochemical plants have restarted, and supply is expected to recover. In addition, in terms of new production capacity, Hengyi Petrochemical stated on January 14 that the basic construction of the 3 million-ton PTA project of Yisheng New Materials Line 2# has been completed and has not been put into production yet.
The Chinese New Year has resulted in weak order situation, both in the local and export markets. Some units have replenished their stocks before the new year holidays. Many weaving plants are expected to resume work after March.
Chinese Spandex Market Is Not Optimistic
On January 26, the domestic spandex market was temporarily stable, and the average market price of 40D specifications was 59,000 yuan/ton, up 27.43% year-on-year. At present, 7.8% of the spandex industry has started construction, the supply of goods is stable, the inventory supply is sufficient, the festival atmosphere is strong, and the overall market atmosphere is light.
The upstream raw material market adjusted in a narrow range. The pure MDI industry started 4.6% of the construction, and the start was flat. The holiday atmosphere was strong, and a small number of offers were stable. The overall start-up load of PTA/MEG has decreased. The market quotation of 1800 molecular weight is 45,000-46,000 yuan/ton, and the negotiation evaluation is 44,500-45,500 yuan/ton.
The downstream terminal textile market will only pick up after the holiday season.
Upcoming spandex projects in China
Recently, Xiamen held a centralised start-up activity for major projects in 2022, and the Xiamen Lilong project with an annual output of 13,000 tons of spandex is listed. Xiamen Lilong’s existing spandex production capacity is 18,000 tons, and a new project with an annual output of 13,000 tons of ultra-fine denier spandex has a total of 8 high-speed spinning production lines.
Another leading chemical fibre company, Hengshen Synthetic Fiber Technology’s spandex project is also expected to start construction this year. Hengshen spandex currently has a total production capacity of over 30,000 tons in the first and second phases. The spandex project expanded by Xiamen Lilong and Hengshen Spandex will add nearly 50,000 tons of spandex production capacity in Fujian.
Spandex prices under pressure
In terms of price, the domestic spandex market has continued to decline since January. As of January 17, the average market price of 40D specifications was 59,600 yuan/ton, down 6.58% from the beginning of the month and up 37.01% year-on-year.
The overall weakness of the spandex market is difficult to change, the load of its own equipment is relatively high, and the expectation of new production capacity is superimposed, and the pressure on the supply side increases. In addition, the terminal demand trading atmosphere is not good, there are many negative factors, and spandex is still in the process of bottom-seeking.
Meanwhile, in cotton yarn, the demand is at a low level compared with previous years. The market is expected to pick up after the new year, and it is expected to maintain the consolidation pattern in the short term.
Downstream weaving factories continue to be weak. The spring and summer orders in the upper part of the demand are placed, and companies are cautious in receiving orders due to concerns about payment.