Since the fourth quarter, the market price of polyester staple fiber fell to 6,650 yuan/ton in mid-November, all the way to the lowest level in history in 2019. After mid-November, short fiber prices entered a period of low-level shock adjustment. Continuously low profit levels caused prices to continue to rise slightly, but the relative upside potential was limited.
The price trend of polyester staple fiber in the fourth quarter can be roughly divided into the following two stages:
First Stage: weak demand and falling prices. Returning after the National Day, the cost of PTA and ethylene glycol has become warmer and adjusted, but the increase did not last too long. The price of short fiber generally showed a weak decline stage. The main reason is that the downstream demand level before and after the National Day is insufficient. The replenishment volume has declined compared with the same period in previous years. In addition, short fiber factory inventories have accumulated, further suppressing the short fiber market price. On November 15, 2019, the price in East China reached a low of 6,650 yuan/ton.
The second stage: low prices and poor profits. When the price reached a new low level of 6,650 yuan/ton for the whole year, the low price caused the cash flow of the short fiber market to be in a state of continuous loss. From November 15, 2019 to December 16, 2019, the average cash flow of the short fiber market was -116 yuan/ton, and profits fell by 147% year-on-year. This also brought an advance to the maintenance time of short fiber factories. Therefore, the maintenance season in the fourth quarter of 2019 came earlier than in previous years. Polyester bottle flakes took the lead in carrying out a wave of maintenance, and then short fiber and filament increased day by day.
As of the close of trading on January 3, 2020, the mainstream offer for polyester staple fiber in East China is 7,000-7,300 yuan/ton, and the mainstream transaction range is referenced at 6,800-7,000 yuan/ton. As can be seen from Figure 1, the price of short fiber in 2020 is still below the price of the same period in 2018-2019.
Latest news: According to foreign reports on the 3rd, the Baghdad Airport in Iraq was attacked, and at least eight people were killed, including Iranian senior commander Soleimani and Iraqi Popular Mobilization Forces commander Muhandis. The geopolitical crisis suddenly heated up, and European and American crude oil futures prices rose sharply, with Brent rising nearly 2%. Subsequently, the chemical sector collectively rose. At present, PTA has fallen slightly after rising.
In terms of the market outlook, in the short term, the support for raw materials has recovered. There is some replenishment demand in the downstream near the end of the year, and the replenishment volume is still limited at low prices. , but it is expected that short-term production, sales, and transactions will pick up due to the rising news. However, because polyester staple fiber cash flow is still in a loss situation, and raw materials are rising, if they want to reduce cash flow losses, mainstream factories must increase their quotations. However, in view of the situation on the downstream demand side, in the short term, downstream companies may increase their stock prices and increase stocking intentions before the Spring Festival, or It can trigger another wave of recovery before the Spring Festival, but this increase is not expected to be strong enough. Overall estimate: In January 2020, short fiber prices will still be mainly stable and weakening.
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