Weakness Is Hard to Change for Polyester Chips Market

Since this week, influenced by boosted macro side, strong feedstocks rebound in the upstream market and better production-marketing of downstream polyester products, polyester chips market stopped slumping and became steady. At present, the leading quotations of semi-dull chips are around 11450-11600 Yuan/ton by cash and 11900 Yuan/ton by acceptance, while the leading close price is around 11400 Yuan/ton. Besides, as some of the manufacturers saw production-marketing rise back to over 100%, the market is very inspiring. However, in fact, recent rebound of polyester chips market is mainly caused by the increasing feedstocks prices. As the essence of pushing by the feedstocks cost has never changed and the downstream demand didn’t follow the increasing tendency, most orders are brought by rigid demand and the quantities are small. From a comprehensive point of view, the present tendency is very struggling and difficult to tell whether it will be up or down.

Uncertain Feedstock Tendency

Although the feedstocks saw increase, the overall tendency is still hard to tell because the non-interest factors still affects the market. In this week, PTA futures kept rebounding and the spot price also increased dramatically. However, most traders didn’t turn optimistic about the afterward market; instead, they used this chance to sell the goods enormously. The condition is the same for MEG market. Although market price increased, the real demand didn’t follow the same tendency, which made the rebound of polyester products even more useless. The following tendency is still hard to tell and very uncertain. Market sources said this run of increasing was created by joint investment of the manufacturers. Although it was an inspiring scene, the essence is worth considering. Under this kind of environment, polyester chips manufacturers were hesitate to increase the prices; while the firm tendency of feedstocks stimulated the growing wish of polyester chips, it became really though for the manufacturers to decide the following trends of their products.

Calm Reaction of Downstream Manufacturers

In downstream market, the price of polyester chips spinning mills kept steady but the sales were comparatively low. Besides, the operating rate stayed at a low level after the National Day, so the demand was also limited. In consideration of own costs, weaving manufacturers contradicted the price increase of polyester chips. Although the chips’ manufacturers are clear about the attitude of downstream mills, they have to consider their profit because the increasing rate of chips is not as high as feedstocks’. The downstream mills also understand that the chips manufacturers would like them to accept the increasing tendency of chip products. Although the mills are reluctant to buy the expensive chips products, while considering the operation problem, they have to do the purchase anyway. Therefore, the conflicts between the chips manufacturers and the mills are really difficult to even.

In recent times, PX, PTA and MEG’s quotations all showed growing trends, which means the feedstocks is still pushing the market. It is undeniable that the downstream manufacturers will not purchase the products in great quantities with the present high prices. To sum up, the upstream and downstream market is not harmonious at present and there is no effective way of compromise between these two parts. The overall market still depends on the feedstock’s tendency and the unbeneficial factors still occupies the macro market to a large extent. The weakness still cannot be avoided in a long run.