Since January 2024, the game between the warm macro atmosphere and the bearish supply and demand side of polyester staple fiber has continued, and industry processing fees have gradually been compressed. According to statistics from Longzhong Information, from January to now, the average cash flow of the industry is only -421 yuan/ton, a year-on-year loss of 250 yuan/ton.
In this regard, Xiang Hongjiao, manager of the chemical fiber division of Longzhong Information, said that from January to now, the average spot processing fee for polyester staple fiber is only 782.17 yuan/ton, down 24.25% year-on-year. “Affected by the geopolitical situation in the early stage, the cost of polyester continued to remain high, but the supply and demand support of polyester staple fiber itself was not good, and it was difficult for spot stocks to keep up with the increase, resulting in shrinking processing fees.” Xiang Hongjiao said.
The reporter learned that the current processing fee space of the short fiber industry has been significantly reduced compared with the same period in 2022 and 2023, and the industry’s loss pressure has also increased significantly compared with the same period in 2022 and 2023. Among them, the high point of polyester staple fiber cash flow in 2023 is 18.43 yuan/ton, a decrease of 397.57 yuan/ton from 2022.
Founder mid-term futures analyst Yu Yangfeng told reporters that in the same period last year, costs were relatively weak, and the market had greater expectations for short fiber demand. The demand was improving, and the short fiber processing fee remained at around 1,100 yuan/ton, which was significantly stronger than This year.
In the general opinion of interviewees, the main reason for the continued compression of short fiber processing fees is weak demand and strong costs.
According to Chen Sheng, an analyst at Guomao Futures, the compression of short fiber processing fees is mainly caused by the sharp rise in PTA and ethylene glycol in a short period of time.
Chen Sheng said that as the octane premium of aromatics in North America continues to improve, PTA prices have strengthened significantly. The spread between European gasoline and naphtha has widened, causing oil blenders to use more naphtha to lock in profits, while the load on U.S. refineries remains high. Moreover, with the changes in RVP in North America after March, the demand for aromatics has been raised by the market again. The average price difference between mixed xylene and naphtha in Asia is around US$240/ton.
“Currently, the shipping congestion in the Panama Canal has eased, and the price difference between the United States and Asia for mixed xylene has widened to about US$190/ton, and the arbitrage window has opened. The price difference between PX and mixed xylene remains at US$110/ton, and profits have been It is enough to maintain the operation of short-process equipment.” Chen Sheng said.
The core of the rise in ethylene glycol prices and profit recovery lies in the expectation of continued inventory depletion. “There is already news in the market that large-scale ethylene glycol units will operate at reduced costs due to profit issues. The maintenance of overseas ethylene glycol units has led to a decline in imports.” Chen Sheng believes that short fiber has entered the off-season in the short term, and the market has not yet formed enough buying momentum. , so the rise in raw material end makes short fiber profits poor.
The reporter learned that some companies said that the current industry is under great pressure to lose money. On January 16, some polyester staple fiber factories tentatively raised their quotations based on factors such as cost support remaining and news performance being acceptable. The current market quotations and negotiated prices for polyester staple fiber have both increased month-on-month.
In this regard, Yu Yangfeng explained that with low processing fees, costs are strong and downstream inventories are low. There is a need for replenishment before the Spring Festival. In order to avoid further deepening losses, short fiber companies have still maintained strong market quotations. “For enterprises, in the early stage of losses, they will not take the initiative to stop parking to reduce the burden, but will see who can’t bear it first.” Yu Yangfeng said that the Spring Festival is approaching, and there will be more parking in the plan from late January to early February, and other manufacturers will There is a high probability that further maintenance will not be initiated due to losses.
During the interview, the reporter learned that the key factors currently dominating the short fiber market are cost and supply and demand. “Based on the geopolitical situation, macroeconomic policies and other considerations, the support brought by cost expectations is still relatively strong.” Xiang Hongjiao said that before the Spring Festival, the staple fiber market mainly focuses on factory maintenance or production reduction efforts, yarn mill orders and stocking. “At present, some major vortex spinning mills are still relatively strong in pre-holiday stocking. We need to pay attention to how much the stocking efforts of spinning mills digest short fiber stock rights.” She said.
The key to currently dominating the short fiber market is the cost side. “Recently, the profits of ethylene glycol have been restored to a certain extent, the operating load of some enterprises has also been improved to a certain extent, and the increase in domestic supply has been clear. Moreover, from the end of January to late February, the polyester end production reduction and suspension plans are relatively concentrated, and the supply and demand have increased. , the supply pressure of ethylene glycol itself is also great.” Wang Jing, a market participant, believes that in the short term, it will not be difficult to moderately repair the processing fees of the polyester staple fiber industry, but if there are no other sudden factors to boost the processing fees, it will be difficult to make a major repair of the processing fees.
In Xiang Hongjiao’s view, whether the short fiber processing fee can be significantly restored in the future mainly depends on the downstream stocking efforts before the holiday and the factory’s own maintenance or production reduction efforts. “The spot processing fee for short fiber before the holiday may be restored to around 900 yuan/ton.” She said.
Currently, downstream raw material inventories are at historically low levels, and there is a need for pre-holiday replenishment. “If short fiber continues to oscillate strongly driven by costs, traders and downstream companies may start replenishment and need to pay attention to the pace and intensity of market replenishment.” Yu Yangfeng said.
“During the Spring Festival in 2024, due to the decline in polyester staple fiber profits and the gradual shutdown of downstream factories, the supply side is expected to shrink and gradually enter the low inventory stage. As the downstream begins to recover in March, the supply and demand relationship in the short fiber market may appear. Sexual mismatch.” Chen Sheng said.