Since late October, China's polyester market has maintained a range of fluctuations, making it difficult for the market to form a sustained trend. The international crude oil market fluctuated at a low level, and the polyester market fluctuated within a narrow range following the cost end. With the advent of "Super Week", this week is about to usher in three major events.
The 12th meeting of the Standing Committee of the 14th National People's Congress is scheduled to be held in Beijing from November 4th to 8th. According to the chairman's suggestion, the State Council's report on financial work and a comprehensive report on the management of state-owned assets in 2023 will be reviewed at that time. The meeting reviewed the State Council's proposal to submit for review to increase the local government debt limit to replace existing hidden debt.
On November 5, local time, the U.S. general election will usher in polling day. U.S. Democratic presidential candidate and Vice President Harris and Republican presidential candidate and former President Trump will face off in the general election on November 5. It is expected that the election results may be basically clear as early as noon on the 6th Beijing time. However, polls show that polls across the country and in the seven swing states that are expected to determine the results are completely stuck. Investors are cautious ahead of the U.S. election, waiting for the results of this election, which will have a major impact on the global economy.
In the early morning of November 8 (Friday), Beijing time, the Federal Reserve will hold an interest rate meeting to announce interest rate decisions. According to "Federal Reserve Observation", the probability that the Federal Reserve will cut interest rates by 25 basis points by November is 99.7%, and the probability that the current interest rate will remain unchanged is 0%. The Reserve Bank of Australia and the Bank of England will also announce interest rate decisions on November 5 (Tuesday) and November 7 (Thursday), Beijing time respectively. Whether the Bank of England will restart easing is of concern.
The U.S. election process will still dominate the trend of major asset classes, and investors have obviously begun to avoid risks in advance. Uncertainty and increased geopolitical risks in the U.S. election will continue to stimulate market demand for hedging. However, as China's macro policy support increases, market expectations have improved significantly, and funding is expected to continue to improve. The macro level still has high complexity and uncertainty.
Judging from the fundamentals of polyester raw materials themselves, recent changes in the equipment of PTA companies have been limited. PTA companies have maintained a level of around 80%. The market spot supply is sufficient, and PTA is in a warehouse accumulation cycle. Recently, ethylene glycol inventories in the main port have fallen sharply, and inventories have remained low, and the supply side has supported the market. From the demand side, the recent construction of downstream polyester companies has maintained a high level of around 90%. Terminal textile and weaving enterprises have maintained a high level of start-up operations, and demand support is solid.
On the whole, as the U.S. election comes to an end in the later period and after the Standing Committee of the National People's Congress of China is convened, the macro direction will soon become clear, fundamentals will re-dominate pricing, and the supply and demand sides of the polyester raw material PTA and ethylene glycol markets will support it. It is expected that the short-term market will fluctuate within a narrow range, driven by the polyester raw material side. The polyester market offers will be mainly adjusted slightly based on costs. The downstream just need to follow up, and the market production and sales are sluggish. 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.
