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Insight | Time: Oct 19 2020 9:14AM
Calm reflection under hot market atmosphere
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Polyester market was very hot when demand hit expectation after the National Day holiday. Price of PSF futures hit limit up on Friday again. Overall market seemed to be exciting.

However, after comparing other products, cotton and viscose market changed more greatly.

It reminded us the news about the order transfer from India. India is competitive in cotton textiles rather than polyester. Cotton and viscose market is so hot recently, which seems to echo the order transfer. Thus, demand for polyester is stimulated by that for cotton and viscose? After all, textile and apparel market does not specify feedstock strictly. Theoretically, synchronization effect exists on feedstock market.

However, polyester market has its down demand, such as local orders for the online shopping spree on Nov 11 and export orders for home textiles etc. Coupled with the stimulus from cotton textile market, rising price is not strange synchronously under mentality resonance.

What level has different products gone to? After checking the long-term tendency, the result is astonishing.

Price of polyester related products rebounded apparently in recent period but was still low compared with historic level, which has not rallied to the peak in Jun 2020.

However, price of cotton and viscose has rebounded to yearly high. Viscose price has touched the level at the end of last year, and cotton price was close to the peak in 2019.

How to interpret these data?
Firstly, seen from the price tendency, the momentum on cotton and viscose market seemed to be stronger than that of polyester fibers. The dominance of demand still cannot be proved absolutely, while it can be followed up later.

Secondly, optimistically speaking, price of polyester fibers was relatively cheaper compared with cotton and viscose, which can be accepted by buyers. Polyester fibers are relatively safer and its price may have upward space.

Thirdly, cautiously speaking, does risk on cotton and viscose market bigger after price rose so much recently? How large is the order transfer and how long it will last are crucial, and supply/demand structure has the final say. However, whether price can reach the level in 2019 stimulated by improving demand is uncertain.

The above is just an introduction, deep-seated causes and development can continue being followed up. Recent improvement comes too fast, and many people feel a little uneasy. It may be better to make a comparison from different aspects and respond in time.

For continuous data and analysis on the fiber market, CCFGroup has regular weekly and biweekly report on it. You can find more from the sample report China fiber market updates &Asian textile and apparel market report
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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