SunSirs: Sep 27

According to SunSirs’ price monitoring, the domestic polyester filament market drops slightly this week, and the drop of polyester FDY is obvious. On Sep 27, the average price of polyester FDY (150D/96F) is 7,873RMB/t, 2.48% lower than that of the beginning of this week, 32.01% lower year on year. The average price of polyester POY(150D/48F) is 7826RMB/t, 1.86% lower than that of the beginning of this week, 32.18% lower year on year. The average price of polyester DYT (150D/48F low elasticity) is 9,230RMB/t, 0.93% lower than that of the beginning of this week, 28.43% lower year on year.

When it comes to the cost side, driven by the news of the rapid resumption of production in Saudi Arabia, oil prices have been swung lower this week. Constrainted by crude oil, PTA prices have been down as well. On Sep 27, the domestic PTA spot price is 5,130RMB/t, 0.97% lower than that of the beginning of this week and 36.01% lower year on year. In addition, the overhaul and restart of PTA devices make it possible to have around 92% operating rate, which does not rule out the possibility of accidental shutdown and overhaul. At present, the spot market is full of circulating goods, and the willingness of traders to sell goods before the festival has been strengthened.

With the National Day approaching, downstream weaving enterprises put the shutdown plans onto the agenda, while the stock of raw materials is relatively sufficient. The operating rate of looms have been decreased gradually, and the overall rate in Jiangsu and Zhejiang will be around 78%, 1% lower than that of the beginning of week. The terminal market mostly maintained just need to get goods, and the fourth quarter is near the end of the year, the closing consolidation is the main trend, the purchase mood is not high, the following-up demand is not optimistic.

From the perspective of textile industry, according to the Textile Index from SunSirs, this week shows a trend of first rising and then falling. On Sep 26, the Textile Index was 877 points, 1 point more than that of the beginning of this week. 24.05% lower than the peak of 1,156 points in the cycle (Sep 3, 2018), and 22.80% higher than the lowest point of 715 (Feb 17, 2016). (Cycle: Dec, 1 2011 to date)

In the term of the exports of textiles and garments, according to the latest statistics of the General Administration of Customs, in August 2019, China's exports of textiles and garments amounted to $25.714 billion, 6.54% lower than last month and 4.95% lower year on year. Textile exports (including textile yarns, fabrics and products) amounted to $10.147 billion, 2.61% lower compared with the same period last year, while garment exports (including garments and accessories) amounted to $15.698 billion, a decrease of 6.38% compared with the same period last year.

Analysist from SunSirs believes that, on the cost side, international oil prices will continue to swing to low under the influence of Saudi Arabia's early recovered capacity. The overhaul plans of PTA devices increase, to some extent, supporting the PTA prices. But the market lacks further significant incentives, PTA is expected to swing lower mainly. At the same time, the National Day holiday is approaching, the trading atmosphere of the terminal market will obviously be weak. The problems of high inventory, low profit and receivables are obvious, and demand-side’s negative sentiment is still strong. Generally speaking, it is more likely that polyester filament will continue to decline slightly in the short term.

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