It is expected that the future market for polyester staple fiber will be stable

With the increasing cost of raw materials and a recovery in the downstream yarn market, the polyester staple fiber market has seen a gradual improvement. Trading volumes have risen, and prices have continued to climb. Comment: We believe that the current upward trend in polyester staple fiber prices is supported by both rising costs and strong demand. However, in 2010, we don't expect a sharp increase or decline in prices. The link between polyester staple fiber and cotton prices may weaken due to changing market dynamics. Based on fundamental factors, the price is likely to remain relatively high, possibly around 15,000 yuan per ton. Here’s why: Looking ahead, cotton prices are expected to rise but could also face a downward trend. Although global cotton production is limited by planting area and will likely stabilize at around 25–28 million tons annually, increased demand from China and a recovering global economy could support prices. However, new cotton supplies, policy pressures, and slower growth in downstream textile industries might lead to a pullback in cotton prices, which would put pressure on polyester staple fiber prices. The premium positioning of cotton in high-end textiles has reduced its correlation with polyester staple fibers. While the substitution effect between polyester and cotton has only boosted polyester demand by 7.1%, the shift in consumer preferences toward higher-quality cotton means the long-term price gap between the two will persist. The nature of the polyester staple fiber industry suggests that prices won’t sustain massive profits in the short term. Major production equipment is domestically manufactured, and the industry has low entry barriers. Currently, profitability remains acceptable. However, if the industry continues to grow, existing idle capacity or new projects may come online, potentially affecting supply and pricing. In the future, textile exports may slow down. In 2010, export growth reached 28.4%, but with external demand stabilizing, currency appreciation, and rising input costs, the export growth rate for textiles is expected to slow in 2011. This could, in turn, put pressure on upstream polyester staple fiber prices.