Since mid June, the price of staple fibers has been fluctuating upwards, with the main 2311 contract price exceeding 8000 yuan/ton at one point. However, in the traditional peak season of September, it has entered a period of rebound after rising. Can the polyester staple fiber market take a step up after the National Day holiday?

Production intention of polyester staple fiber manufacturers has declined

In September, although entering the traditional "Jinjiu" market, there was no significant improvement in demand in various downstream markets. Relatively speaking, the demand for near pure polyester sewing thread and spunlaced non-woven fabric markets was relatively stable, and the profit margin was also relatively good. Other markets continued to suffer from a shortage of orders, high inventory, and poor profitability. Therefore, the supply pressure of polyester staple fibers remained high during the month, and the inventory level of other equity showed a sustained slight increase.

According to Longzhong data, as of September, the equity inventory level and physical inventory level of the polyester staple fiber industry have shown a sustained slight increase. As of September 22, the average equity inventory level of enterprises was 9.36 days, an increase of 1.24 days or 15.27% compared to the same period last month; As of September 22, the average physical inventory level of enterprises was 15.61 days, an increase of 1.09 days or 83% compared to the same period last month.

Although the overall price of polyester staple fiber in the market fluctuated and rose in September, its increase was still lower than the cost side, so the industry profit level continued to narrow month on month. As of September 25th, the average cash flow level for the month was -255.47 yuan/ton, an increase of 60.34 yuan/ton compared to the same period in August. Continued losses and a gradual increase in the extent of losses have led to a decline in the production intention of some polyester staple fiber enterprises.

Some polyester staple fiber practitioners are bullish on the market

Regarding the market expectations for polyester staple fibers after the National Day holiday, some manufacturers have the following views: 37% of manufacturers hold a range fluctuation view.

The main judgment is still as follows: cost support still exists, but demand improvement is limited. In a long short game, the probability of short fiber prices maintaining range consolidation is relatively high; 32% of businesses believe that the downward pressure is significant. Mainly because downstream yarn factories have poor access to new orders, high inventory, and poor profitability; In addition, with the arrival of the Double Festival, some terminal factories are considering false storage, and the expected decrease in operating load is expected; 31% of businesses hold a bullish view. The main judgment basis is that the PTA reduction in the later stage will increase, and OPEC+production reduction will continue until the end of this year, with cost support still remaining; And next week is approaching the Double Holidays of Mid Autumn Festival and National Day, so there may be support for stocking up before the holiday.

From the perspective of crude oil supply, OPEC+maintains production reduction, with Saudi Arabia maintaining a production reduction measure of 1 million barrels per day by the end of December 2023. From this decision, Saudi Arabia's crude oil production will remain at a level of 9 million barrels per day. Russia has also stated that it will reduce its daily crude oil exports by 300000 barrels to the global market until the end of 2023. Even if Iran's oil production increases, it will be difficult to change the supply gap in the crude oil market caused by the reduction of production in the two major oil producing countries. It is expected that the shortage of crude oil supply will continue until the fourth quarter of this year.

Overall, from the perspective of supply and demand, the destocking pattern of crude oil will continue until the end of the year, and the price is unlikely to fall. The cost support for downstream oil and chemical products will continue to exist, and the risk above oil prices lies in the macro inflation caused by high prices

Secondly, downstream consumption is in the peak season, and the current textile terminal demand is significantly stronger. Downstream has entered the peak season of gold, silver, and ten, and the supply and demand pattern has improved. Short fibers keep up with the increase in raw materials and maintain their reasonable profits.

From the perspective of the short fiber supply side, there have been some devices undergoing phased maintenance recently, with a slight contraction in supply and little overall change, maintaining around 86% in the past two months. The current cash flow of short fiber enterprises is good, and they have been maintaining a positive cash flow state since May. The company is expected to maintain a high starting point.

Based on the above analysis, we believe that the rise in raw material prices and the improvement in terminal demand are the main factors driving the continuous strength of staple fiber prices. There is a high probability that the strong fundamentals of crude oil will continue into the fourth quarter, with short-term downstream petrochemical industry supported by costs. However, there is an expectation of seasonal weakness in terminal demand after the National Day holiday, when short fiber may gradually come under pressure and price performance may be weaker than raw materials. It is recommended to pay attention to the quality of demand after the holiday.

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