Polyester: Terminal Off-season is Approaching, and Market is under Pressure

Polyester: Terminal Off-season is Approaching, and Market is under Pressure

Introduction: With the gradual end of the "Golden Sep and Silver Oct" demand peak season and the approaching off-season of terminal textile demand, the market trading atmosphere has begun to cool, and future demand expectations have weakened, forming a pressure on the overall polyester industry market mentality. In the short term, the domestic polyester market prices remain low and Volatile

The domestic polyester industry market did not perform well during the traditional "Golden Sep and Silver Oct" demand peak season. The polyester industry market began to fluctuate and recover from late September, and gradually hit the bottom on October 23. On October 24, the Central finance will issue an additional 1 trillion yuan of 2023 treasury bond in the fourth quarter of this year. The policy will be boosted in the face of the market. Coupled with the improvement of Sino-US relations, the atmosphere of the commodity market has improved, and the polyester industry market has seen a slight rebound at the end of the month. However, under the geopolitical influence of the Israeli-Palestinian conflict, the international crude oil market has become more volatile, which has suppressed the overall market mentality and increased market uncertainty. Therefore, the overall upward momentum of the polyester market is relatively weak.

The domestic polyester market has been in a weak trend for a long time, with poor production and sales data for polyester enterprises. The production and sales of polyester enterprises have been maintained at a low level of 40% -60% for a long time. In addition, since the end of the Asian Games, polyester plants that had previously reduced production or shut down have gradually recovered, and the overall industry operation has increased to a high level of around 90%. As a result, the market supply has increased, and the inventory pressure of polyester enterprises has gradually increased. As of last weekend, the inventory of polyester POY factory was 16-18 days, FDY factory inventory was 20-22 days, DTY inventory was 27-30 days, and polyester staple fiber factory inventory was 7-10 days. Under the rebound of polyester raw materials PTA and ethylene glycol at the end of the month, the polyester filament market has gone against the trend of raw materials, and polyester filament manufacturers have started to significantly reduce prices and promote sales. Especially over the weekend, polyester filament enterprises offered profits to sell, and downstream concentrated restocking. Enterprise production and sales have increased, with some enterprises' production and sales data reaching as high as 400% -600%.

With the price reduction and promotion of polyester enterprises, the market for polyester raw materials PTA and ethylene glycol continues to rebound slightly, and the production cost pressure of polyester enterprises gradually increases. The production cash flow of polyester enterprises is gradually squeezed, especially the production losses of polyester enterprises are increasing, and the profits of polyester chips are falling to the bottom line. As of now, the profit of polyester chip products is 16 yuan/ton, bottle grade polyester chip products are -274 yuan/ton, polyester filament products are -389 yuan/ton, and polyester staple fiber products are 106 yuan/ton.

Although terminal weaving enterprises are still operating at a high level of around 80%, as the peak demand season gradually comes to an end, the characteristics of the off-season textile industry are beginning to emerge. The atmosphere of the terminal textile market has cooled down, with only just rigid demand orders being the main focus. Enterprises have insufficient new orders, and fabric inventory remains high. The market saw a normal selling condition, with foreign trade Christmas orders gradually ending. The future expectation of terminal orders is weak, which has dragged down the confidence of weaving enterprises in starting operations, and the market's wait-and-see sentiment is obvious. With the gradual weakening of demand in the textile industry, there will be a seasonal decline in the starting load of weaving in the later stage.

The international crude oil market fluctuates at high levels, and the polyester raw material PTA and ethylene glycol market are driven by the cost side. In the short term, the market will maintain a narrow adjustment. Under high cost pressure, the short-term polyester market will fluctuate and consolidate with costs. However, as the off-season of terminal demand approaches and demand weakens, the polyester market will still face significant pressure in the future. Pay close attention to the changes in the raw material market and demand in the later stage.