The warm cost dominates the price trend. According to the commodity market analysis system of Business Society, the domestic polyester staple fiber market fluctuated and adjusted upwards in January. As of January 14th, the average ex factory price of 1.4D * 38mm in Jiangsu and Zhejiang regions was 7276 yuan/ton, an increase of 2.10% from the beginning of the month.

The US Treasury Department has imposed comprehensive sanctions on a European country’s oil industry, intensifying market concerns about disruptions in its oil supply. International crude oil prices have risen sharply. As of January 14th, the settlement price of the main contract for WTI crude oil futures in the United States was $77.50 per barrel, and the settlement price of the main contract for Brent crude oil futures was $79.92 per barrel.

The PTA spot market followed the rise of crude oil, with the average PTA market price in East China at 4996 yuan/ton as of January 14th, up 4.30% from the beginning of the month. In terms of self supply, Jiaxing Petrochemical’s 1.5 million ton PTA plant underwent maintenance on December 12th and will restart on January 13th, 2025. Rolex’s 1.25 million tons will undergo maintenance around January 13th. The current spot market supply is still sufficient, and the industry operating rate is around 81%.

In addition, the decline in self supply has also had a greater impact on the driving force of polyester staple fiber. Recently, there has been a reduction in production and an increase in maintenance of polyester staple fiber equipment, resulting in a gradual contraction of supply liquidity.

There is no significant increase in terminal orders, and the main focus is on essential procurement. The Spring Festival is approaching, and there are many holiday maintenance plans. The operating rate of terminal looms has dropped to around 63%, and the stocking phase has ended.

Business analysts believe that the short-term cost increase dominates the polyester staple fiber market, but its sustainability is highly uncertain, so further upward space is limited.

Sinopec East China’s listing price will increase by 100 yuan/ton, with an execution of 6050 yuan/ton, while Sinopec North China’s listing price will increase by 100 yuan/ton, with an execution of 6150 yuan/ton. The port inventory has significantly decreased to 23000 tons, and the rise in raw materials has driven a positive attitude among traders. According to the analysis system of Business Society, the negotiated price reference in the East China market is 6000 yuan/ton, an increase of 100 yuan/ton from yesterday.

Raw materials are supported by rising prices, spot circulation sources are tightening, petrochemical companies are raising their listing prices in a concentrated manner, traders have a positive attitude, and offers are rapidly rising. Expected to operate at a high level in the short term.

The acetone offers in major mainstream markets across the country on January 13th are as follows:

Region/ Quotation/ Daily increase and decrease

East China region/ 6000./ 100

Shandong region/ 6050./ 50

Yanshan region/ 6050./ 50

South China region/ 6050./ 50

In 2024, Shunding rubber first rose and then fell, and overall rose

In 2024, the significant increase in the cost of butadiene rubber supported the high price of butadiene rubber. The profit of butadiene rubber enterprises decreased, and the overall industry production was low. In addition, the price of natural rubber increased significantly, and the demand for substitute butadiene rubber increased. The overall fundamentals of the butadiene rubber market in 2024 were relatively strong, with prices rising sharply in the first three quarters. In the fourth quarter, due to the impact of cost decline and increased production, the next high point fell and then the range was mainly adjusted. According to the monitoring of Shengyi Society, as of December 31, 2024, the market price of butadiene rubber was 13720 yuan/ton, an increase of 10.38% from 11739 yuan/ton at the beginning of the year; The high point of the cycle was 16810 yuan/ton in early October, and the low point of the cycle was 12200 yuan/ton at the end of January.

In the first three quarters, unexpected incidents occurred frequently in the supply side of raw material butadiene, and prices continued to rise. In addition, the continuous losses of the Shunding rubber equipment and the frequent proactive production control and parking behaviors of enterprises have led to tight supply in the Shunding rubber market. In addition, in August and September, natural rubber was affected by typhoon weather, and there were concerns about tight supply in the market. Shanghai rubber prices quickly rose, and butadiene rubber was driven by this, resulting in a resonance increase in current prices. After the National Day holiday at the beginning of the fourth quarter, accompanied by a cooling of macro sentiment and a high drop in the price of raw material butadiene, the profits of Shunding rubber factory have recovered, and the production of Shunding has gradually increased, resulting in increased supply pressure. Downstream tire production has remained stable with slight fluctuations, providing strong support for the demand for butadiene rubber, but resisting high priced sources. In addition, domestic natural rubber prices have stabilized at a high level, and the substitutability of butadiene rubber still exists. Under the comprehensive influence, the market for butadiene rubber in the fourth quarter mainly saw a range consolidation after a high-level decline.

The basic outlook for butadiene rubber in 2024 is good

The tight supply in the butadiene market has led to a significant increase in prices, while the cost of butadiene rubber is supported

In 2024, the start of the raw material butadiene plant was relatively low. On the one hand, the release of new production capacity was not smooth, and on the other hand, some butadiene plants in Southeast Asia were temporarily shut down, resulting in a tight supply of butadiene resources in domestic and foreign markets and a significant increase in butadiene prices. In the fourth quarter, due to the expected commissioning of a plant in Tianjin, the price of butadiene fell from a high level. According to the monitoring of Shengyi Society, as of December 31, 2024, the domestic price of butadiene was 10800 yuan/ton, an increase of% from 8575 yuan/ton at the beginning of the year, and the peak of the cycle was 13725 yuan/ton in early July.

The overall production of Shunding rubber plant in 2024 is relatively low, with no pressure on the supply side

Affected by continuous cost increases in the first three quarters of 2024, Shunding Rubber is facing a significant loss situation, and the overall enthusiasm of rubber factories to start production is low. The supply side is facing strong market support; In the fourth quarter, with the profit recovery brought by the decrease in costs, the early parking facilities were gradually restarted, and the supply of butadiene rubber increased.

The overall stability and fluctuation of downstream tire construction in 2024 provide support for the rigid demand of butadiene rubber

In 2024, the operating rate of all steel tires remained relatively low compared to the same period last year, but the inventory of all steel tires gradually decreased in the second half of the year and the operating rate steadily increased. In 2024, the operating rate of semi steel tires remained relatively high year-on-year, and downstream passenger car sales continued to improve. The inventory of semi steel tires has remained at a relatively low level. Although the production of all steel tires has a low demand for dragging rubber, the overall consumption of butadiene rubber in tire production is relatively high year-on-year due to the sustained improvement in demand for semi steel tires.

Outlook for the Shunding Rubber Market in 2025

Except for the newly put into operation units in 2024, there are still plans to put new butadiene production capacity into operation in 2025. According to statistics, China’s butadiene production capacity in 2024 is 6.697 million tons per year, an increase of 150000 tons from 6.546 million tons in 2023. According to statistical data, China’s butadiene production capacity plan is expected to increase by about 1.2 million tons in 2025. Based on this amount, China’s butadiene production capacity is expected to reach 7.89 million tons per year by 2025., Therefore, the market expects that the supply of butadiene will become relatively loose in 2025, and the supply side’s support for prices will weaken.

At present, Yulong’s 150000 ton Gaoshun Shunding rubber plant is in the trial stage, and it is expected to release production in the first quarter of 2025, with a slight increase in Shunding rubber production capacity. In addition, in 2025, except for the major overhaul plan in Maoming, most other facilities will mainly undergo minor repairs. In addition, the expected cost decline will stimulate rubber enterprises to actively schedule production. It is comprehensively expected that the supply of butadiene rubber in 2025 will be more relaxed than in 2024.

On the one hand, the global resident car stock will maintain a growth trend from 2023 to 2025; On the other hand, in the past 2024, the global share of cheap tires in Asia has increased. Overall, the improvement of global residents’ consumption ability and the shift in their consumption habits towards choosing more cost-effective Asian tires are expected to further open up the potential demand space for the replacement tire market, and the demand for replacement tires is expected to continue to grow by 2025. In addition, the downstream demand for automobiles is expected to improve in 2025, especially for new energy vehicles. Encouraged by relevant domestic policies, it is expected that demand will continue to steadily increase. There is a strong need for support for butadiene rubber.

Under the influence of the above factors, it is expected that the price of butadiene rubber will mainly fluctuate within a certain range in 2025, but the high point of the year will decrease compared to 2024.

This week (January 6-10, 2025), the price center of the upstream raw material market for viscose staple fiber remained stable, with low inventory levels in the market and continued support from both the cost and supply sides. However, downstream market procurement enthusiasm was not high, and cotton yarn enterprises had a certain degree of risk aversion. They held onto the demand side and continued to be light, with various viscose staple fiber manufacturers lowering their quotes to varying degrees, resulting in a narrow decline in actual market transaction prices.

According to the Commodity Market Analysis System of Shengyi Society, as of January 10th, the average market price of viscose staple fiber was 13680 yuan/ton, a decrease of 140 yuan/ton from the same period last week, with a weekly decline of 1.01%.

In terms of cost: This week (January 6-10, 2025), the market price of raw material dissolution slurry continued to maintain a stable trend, the market price of auxiliary material liquid alkali rebounded and stopped falling, the market price of sulfuric acid slightly decreased, and the market price center of raw material remained roughly stable. The average production cost of adhesive short fiber did not change much. As of early January, the price of domestically produced dissolving pulp is around 7900 yuan/ton, the price of outer broad-leaved pulp is around 970 US dollars/ton, and the price of coniferous pulp is around 1070 US dollars/ton.

Supply inventory: The operating rate of the adhesive short fiber industry remained at around 87.03% this week, with a slight increase in production compared to last week. The start-up rate of various adhesive short fiber manufacturers’ equipment did not fluctuate significantly during the week, and the on-site supply remained stable; There is currently no pressure on the inventory level on site, but the downstream delivery speed has slowed down, and the overall inventory level on site is showing an increasing trend.

On the demand side: The downstream cotton yarn market replenishes according to demand, and prices remain stable. The market is in the traditional off-season of demand, coupled with the approaching Spring Festival holiday, downstream manufacturers have limited demand for purchasing, and multidimensional demand is holding on to signing orders. Some manufacturers’ orders can be maintained until the end of February, and the demand side performance is weak.

Future forecast

The market for dissolving pulp, the main raw material of viscose staple fiber, may not change much, and the cost side support is stable. Downstream manufacturers have plans to reduce production and have holidays near the Spring Festival. The actual transactions on site are limited, and the demand for replenishment is limited. Therefore, it is difficult for the demand side of the viscose staple fiber market to improve next week. Business analysts predict that the domestic adhesive short fiber market will maintain stable operation in the short term.

According to the Commodity Market Analysis System of Shengyi Society, the PP market was mainly sorted out in early January, and the price changes of most brand products were relatively narrow. As of January 9th, the mainstream offer price for wire drawing by domestic producers and traders is around 7605 yuan/ton, a decrease of -0.54% compared to the price level at the beginning of January.

Price trend

In terms of raw materials:

In terms of international crude oil, due to the strengthening of the US dollar at the end of December and the contraction of consumption, oil prices have weakened. However, with the recent rebound in the market and the continued positive impact of the OPEC+production reduction plan delay, coupled with strong demand in Asia, there has been a rebound in support for the upstream of PP in the far end. Domestic demand for propylene remains strong, with an increase in midstream stocking operations, while the market for propane is weak due to external influences. Overall, in early January, the overall market trend for PP raw materials was more bullish than bearish, and the support on the cost side was still acceptable.

Supply side:

In the first half of the year, there was a mutual occurrence of maintenance and production in domestic PP enterprises, and the overall load level remained stable with small fluctuations. The load of enterprises such as Daxie Petrochemical and Zhonghan Petrochemical has gradually returned, and overall, the industry’s overall load has increased by about 0.5% to 78.5%. The domestic PP shipment volume is flat, with an average weekly output of around 730000 tons. Although some newly put into operation facilities are unstable, the supply is still abundant. Overall, the supply side provides average support for PP spot prices.

In terms of demand:

Within ten days, the demand for PP tends to lean towards rigid demand. Due to seasonal factors, the consumption level of woven bags such as fertilizers, cement, and rice remained stable with a slight decrease during the first ten days. The consumption level of plastic weaving has also declined narrowly, and the willingness to hold positions has cooled down; As the end of the lunar calendar approaches, there is a decline in business operations and a mutual phenomenon of stocking up. The slow release of some pre holiday replenishment demand has to some extent boosted consumption. Overall, the demand side tends to have weak fluctuations in most aspects.

Future forecast

In early January, the domestic PP market prices fluctuated and consolidated. Fundamentally speaking, the overall performance of upstream raw materials in supporting PP is average. The industry supply is basically flat. According to consumer feedback, businesses are cautious about future terminal consumption and tend to focus on restocking for essential needs. In the short term, it is expected that PP prices will remain stagnant.