Driven by Rising Costs, the Price of Polyester Staple Fiber in September Reached a High Level of the Year

The core driving force of the market comes from upstream raw materials. International crude oil remains relatively strong due to geopolitical factors. As of September 25th, the settlement price of the November WTI crude oil futures contract in the United States was $92.41 per barrel, and the settlement price of the December Brent crude oil futures contract was $97.44 per barrel. At the same time, it drove up the prices of PTA and ethylene glycol. As of September 28th, the average market price of PTA in the East China region was 7,293 RMB/ton, an increase of 14.14% from the beginning of the month, immediately raising the production cost of polyester staple fibers.

while the price of short fibers has risen with the increase of raw materials, the sector's processing price difference continues to invert, putting greater pressure on companies to incur losses. The price increase is significantly lagging behind that of upstream raw materials, and the transmission of costs downstream is not smooth. In terms of supply, some factories have implemented production cuts to maintain prices, which has to some extent reduced the circulation of spot goods and provided a support to prices. In mid to late September, the upward momentum of the market slowed down, and some manufacturers saw a slight decrease in their quotes, causing the market to shift from a unilateral rise to a high-level game stage.

The demand side presents typical weak characteristics during peak seasons, becoming the main factor suppressing the market. The operating rate of downstream pure polyester yarn factories remains around 66%, with limited improvement. Faced with high raw material prices, yarn factories are cautious in their procurement and mostly only replenish to essential needs. Their willingness to actively replenish inventory on a substantial scale is weak, and the recovery of terminal autumn and winter textile orders is not as expected by the market, which restricts the further development space of short fibers.

SunSirs analysts believe that in the short term, polyester staple fibers are likely to continue their high evaporative environment pattern, and the long short game will continue. Supported by favorable costs, crude oil and PTA still have the possibility of temporary strength, coupled with the continuous production reduction of short fiber companies, the pressure on spot inventory is not significant, providing bottom support to prices. During the "Golden September and Silver October" textile peak season, there is still an expectation of urgent repair at the terminal. If autumn and winter orders are released in a concentrated manner and downstream inventory is replenished, there is a further upward opportunity to short fibers. However, there are still certain risks, as downstream orders continue to fall short of expectations, high prices suppress procurement, coupled with the restart of upstream PTA maintenance facilities, growing raw material supply, and pressure to a pullback in polyester staple fiber.