The prospect of PET Price is Worrying

Recently, the raw material market fluctuates frequently. It is stimulated by negative factors like the slump of crude oil, so the production and marketing slides and the prices show declining tendency. Accordingly, affected by this wave of decline, PET manufacturers are unprepared to bear such great pressure of production and marketing. Aiming at this problem, the current situation of PET market will be analyzed in this paper.

Currently, PFY prices begin to drop generally in the market. The production and marketing of raw material is also weak. Last week, most manufacturers cut the quotation of their products, especially FDY products. The decline of them was greater, which was around 100-300 Yuan/ton. Furthermore, the price continued to decline in some enterprises on Monday. The production and marketing of the leading manufacturer was just about 50%.

On the other hand, it can be seen from the monitor graph of the sample firms that drew by "China Eastern Silk Market", the average inventory in PET factories this month ascends obviously, which increases from the level of 15 days to the current 25 days. The inventory situation returns to the high level in early days and the pressure of PET manufacturer will increase.

Therefore, we can see from the above situation, the declining PET price and ascending inventory both show obvious rebound in the market. According to the survey, the reasons are as follows:

Due to continually negative news of raw material in recent days, international crude oil dramatically went down on last Friday. The futures price of New York crude oil in Nov. fell 2.23%, while the decline of Brent crude futures reached to 4.23%. Ended by Monday, the futures price of light crude which would be delivered in Nov. closed at 88.73 dollars/bbl in COMEX, which dropped 1.32 dollars, actually declined 1.47%. It was the first time that the futures price fell below 90 dollars after Oct. 8th. Afterwards, PTA and MEG price dropped to 8,300 Yuan/ton and 8,150 Yuan/ton respectively in domestic market. So the market participants all hold a bearish attitude on aftermarket. It can be concluded that the sales situation is difficult to improve and the price is beginning to slide due to the declining upstream raw material and the production and marketing of PET products.

This year, the overall textile market was not prosperous in peak season affected by depressed economy. But the sales improved obviously compared with the early months due to seasonally rigid demand, however, the peak season in Sept. and Oct. will come to an end. And then the purchase enthusiasm in downstream woven market will also decline.

Driven by the interests of “buy rise not buy fall” in raw material market in early days, the purchase enthusiasm climbed, which resulted in the increase of raw material inventory in different downstream woven enterprises. In addition, the situation of oversupply in the market was still serious. Even though the fabric market got better, the inventories of some conventional fabric were still high in downstream woven enterprise in early days. The sales situation was difficult to improve and the hot products were less, especially conventional fabric like polyester taffeta and pongee fabric, which took a lot of market share. So the de-stocking in woven market is still going on this year, which results in weak demands for raw material.

As a whole, under the influence of negative news, downstream PET products continue to go down, which causes the climb of the inventory. But we should see from that along with the end of peak season in downstream woven market, the adjustment pressure of PET raw material may continue to release.