After the National Day, polyester staple fiber experienced a surge in the market, and began to decline gradually in late October, and then fell to the previous low level again in mid-November. The next half month began to continue to fluctuate at a low level. The downstream demand is not optimistic. Under the background of, industrial customers were mostly bearish about the market outlook, but since the beginning of December, polyester staple fiber has begun to rise again. What I thought was that the "three-day tour"-style rising market continued to this day, and most industrial customers were confused.

So the question is, are the fundamentals of polyester staple fiber supply and demand really good? Is terminal demand really optimistic towards the end of the year?

Let's look at one piece of data first, which is the corporate inventory of polyester staple fiber. As shown in the figure below, since 2020, the inventory level of staple fiber enterprises has been well controlled. Except for the high inventory in the first quarter, the inventory of enterprises in the entire second quarter continued to be at a low level.

Although affected by the epidemic at the beginning of the year, the polyester staple fiber market in the first quarter was in dire straits like other polyester products, and the industry started even far below other products. However, after the end of March, the emergence of bargain-hunting prices gradually destocked polyester staple fiber. , And the market driven by non-woven fabrics in April helped companies quickly destock, and even was in the process of oversold, which also led to a rapid increase in industry operating rates.

The concentrated replenishment of downstream and futures traders around the National Day also helped companies to quickly destock, and the company's inventory was even once negative, and it has continued to the present. But it is worth noting that the inventory here is the company’s equity inventory, and the actual physical inventory should be around 10-20 days. So the next very important issue is the dispute between equity inventory and physical inventory.

According to the current situation, although the physical inventory of the company is mostly around 10-20 days, in addition to the large amount of inventory reserved by the current dealers, many spinning mills and traditional traders have not yet delivered the staple fiber. From a standpoint, even the actual physical inventory puts little pressure on the company. In addition, there are maintenance plans for two sets of devices in December, so the current actual supply pressure of enterprises is generally low.

Therefore, based on the current form of supply, staple fiber has a basis for price increases. But if the follow-up continues to rise, will the downstream be able to bear it?

According to the practice of previous years, the downstream capital situation is generally tight at the end of the year. Moreover, it is difficult to increase the volume of foreign trade orders caused by the decline in overseas demand this year. Even if the price increase of staple fiber can be transmitted to the spinning mill, it is extremely difficult for the spinning mill to increase the price. Continued downward transmission, it is difficult to see a substantial improvement in terminal demand, so there is greater resistance to the continued rise of staple fiber.

From the perspective of cost, even though PTA has continued to perform strongly in the near term under tight circulation, the contradiction between supply and demand in the industry is still prominent under the background of the substantial expansion cycle; ethylene glycol will also be affected by the recovery of imports and the increase in long-term domestic supply. Restrain market growth.

On the whole, although the supply pressure of polyester staple fiber is relatively low, the spot market continues to rise under the expectation of weaker demand at the end of the year. In terms of futures, the industry hopes that the global demand brought by the gradual vaccination of multiple countries will return to expectations. The valuation of the 05 contract next year is too high, but the continuous weak staple fiber basis also shows that the spot fundamentals are not very optimistic, and we still need to be cautious in catching up.