Continuous Decline in Crude Oil Futures and Polyester Market Impact
Since last Friday, under the pressure of multiple negative news, international crude oil futures have fallen continuously, and the PX-PT-short fiber market has deepened under the pessimistic commodity atmosphere. Among them, PX and PTA fell more than 6% in a week, and MEG fell more than 4%. Polyester raw materials are so weak, one is because of the crude oil production news hitting raw material costs, and the other is the lack of textile orders due to uncertain market demand. In the short term, the biggest impact on the macro economy should be the Federal Reserve interest rate reduction-related matters.
Federal Reserve Interest Rate Cut Speculation
The weaker-than-expected U.S. nonfarm data for August is expected to go a long way toward determining future Federal Reserve policy, and the latest weak hiring data suggests a rate cut may be imminent. Traders have increased bets that the Fed will cut rates by 50 basis points in September; there is a 50-50 chance the Fed will cut rates by 50 basis points this month. U.S. non-farm payrolls rose by 142,000 in August, below expectations.
Economists expected nonfarm payrolls to rise by 161,000 in August. After the data was released, the dollar fell, and gold pulled straight up, indicating that the market expects the Federal Reserve to cut interest rates this month. It was the lowest since Aug. 5. Figures for the previous two months were revised to show a loss of 86,000 jobs. That means the labor market is much weaker than thought.
John Williams' Comments on Fed Rate Cut
After the data was released, John Williams, president of the Federal Reserve Bank of New York, said it was appropriate for the Fed to cut rates now, given the progress made in lowering inflation and cooling the labor market. Williams said the Fed has made "significant progress" toward its dual goals of maintaining price stability and full employment, and that risks to achieving both are "in equilibrium."
OPEC+ Crude Oil Production Delay
In addition to the Fed rate cut news, crude oil production will also be delayed. OPEC+ is close to a deal to delay an oil output increase planned for October as crude prices plummet to nine-month lows, according to two oil-producing group sources. Because people are worried about a weak global economy, oil prices have been falling. "It is possible that countries will take measures to balance the market by delaying production increases," one of the sources said.
A second source said an OPEC+ deal was "almost done." On the news, oil prices rose in the short term, with Brent crude futures back above $73 a barrel, but still near their lowest level since December; WTI crude is approaching the $70 mark. OPEC+ had originally planned to increase production by 180,000 barrels a day, and the group is now cutting production by 5.86 million barrels a day, equivalent to about 5.7 percent of global demand.
Polyester Market Outlook and Weaving Orders
As of September 5, the average number of days of terminal weaving orders was 14.09 days, an increase of 1.19 days from last week. The decline in the polyester industry chain in this round, in addition to the collapse of costs, is due to the lack of trading textile season. However, compared with the same period in previous years, the current order level of weaving enterprises is not large. From the perspective of load and inventory comparison of each link, the current polyester filament capacity utilization rate is at a high of 87.93%.
The current filament enterprise inventory is reasonable and controllable, with a gross profit level of more than 200 yuan/ton. Staple fiber-yarn link inventory and startup situation are also more reasonable. Based on this knowledge, since September, the end market performance is not too bad. However, in today's overall bearish environment, the delay in crude oil production and the Federal Reserve interest rate cut may bring a short-term market boost, but it is difficult to have a fundamental impact on the lack of demand in the market.
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