Polyester: High raw materials and industries fall into losses across the board

Lead: Since mid-month, as the market for polyester raw materials PTA and ethylene glycol has continued to strengthen, polyester cost pressure has remained high. However, the polyester market has been dragged down by weak demand, and the market has limited follow-up. Therefore, the production and processing costs of polyester enterprises have continued to be compressed, and the polyester industry has now fallen into a loss situation across the board.

Since the 15th of this month, due to the Houthi attack on ships in the Red Sea, which triggered concerns about oil supply interruptions, shipping problems in the Red Sea have continued to ferment and international crude oil has continued to rise. Boosted by this, the atmosphere in China's commodity market has improved. The spot market for raw materials PTA and ethylene glycol futures has also begun to continue to rise. Judging from the supply and demand side of PTA itself, Yisheng New Materials and Yisheng Ningbo's total of 11.4 million tons of equipment temporarily reduced to 70% on December 19 and resumed on the 25th. Xinjiang Zhongtai's 1.2 million tons of PTA equipment was stopped on December 20. The overall start-up of the industry dropped to below 80%, and the supply side of the PTA market decreased. The downstream polyester load remained high, and the market supply and demand sides supported the market. As of last Friday, the PTA spot market had risen to around 5880 yuan/ton, an increase of 5.46% in the past week.

Judging from the fundamentals of the ethylene glycol market itself, the arrival of ethylene glycol ports to Hong Kong has decreased recently, ethylene glycol stocks in the main port of East China are expected to be removed from warehouses, and the load on overseas equipment has a trend of decreasing. In addition, the start-up of China's ethylene glycol industry has dropped slightly recently, and the supply side has formed support for the market. On the demand side: the downstream polyester load remains high and fluctuates, buying orders just needed are stable, and the support on the supply and demand side has increased. As of last Friday, the price of ethylene glycol market in East China rose to 4430 yuan/ton, an increase of 8.27% in the past week, and firm trading was light.

As the market for polyester raw materials PTA and ethylene glycol continues to rise, the pressure on production costs of polyester companies has increased. The polyester market has increased by around 5%-8%. However, polyester products are limited by weak demand, which has limited market growth. The polyester market has increased by only around 2%-3%, and the company's production profits continue to compress. Recently, the production losses of polyester bottle chips and polyester filament companies have deepened, and the production profits of polyester chips and staple fiber companies have begun to lose slightly. So far, the profit of slice products is-81 yuan/ton, the profit of bottle slice products is-336 yuan/ton, the profit of polyester filament products is-201 yuan/ton, and the profit of polyester staple fiber products is-151 yuan/ton.

After entering this week, risk aversion in the financial market has increased as the international crude oil market weighs in on the Red Sea shipping blocked cruise ship detour. On December 25, due to the Christmas holiday in Europe and the United States, the international crude oil market was closed. Driven by the lack of cost, the polyester raw materials PTA and ethylene glycol markets gradually tended to consolidate. The market mentality was more cautious. The supply and demand side of the polyester raw materials PTA and ethylene glycol markets was pushed. It is expected that the short-term market will adjust within a narrow range, with the polyester raw material side supporting it. The polyester market offers will be adjusted slightly based on costs. The downstream just need to stock up, and the market production and sales are acceptable. Short-term polyester market prices are expected to fluctuate within a narrow range. In the later period, we will pay close attention to changes in the raw material market and the supply and demand side of polyester itself.