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

With the increasing cost of raw materials and a gradual recovery in the downstream yarn market, the polyester staple fiber market has seen an improvement in sentiment, with higher trading volumes and rising prices. Comment: We believe that the current price trend of polyester staple fiber is likely to continue upward, driven by strong demand and cost support. However, looking ahead, we don't expect sharp fluctuations in 2010. The link between polyester staple fiber and cotton prices may weaken in the future. Given the fundamentals of the industry, the median price could remain relatively high, around 15,000 yuan per ton. Here’s why: In the coming period, cotton prices are expected to rise significantly but may eventually decline. This is due to limitations in planting areas, which will keep global cotton output stable at approximately 25–28 million tons in the long term. Meanwhile, as the global economy slowly recovers, China's increased cotton imports have supported demand. However, factors such as new cotton supplies, policy pressures, and slower growth in the textile sector may cause cotton prices to fall back, putting downward pressure on polyester staple fiber prices. Additionally, the positioning of cotton in high-end textiles has weakened its connection 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 premium cotton products means the link between the two will continue to weaken. As a result, the price gap between cotton and polyester staple fiber is expected to persist for a long time. The nature of the polyester staple fiber industry also suggests that prices won’t sustain large profits in the short term. Major production equipment is domestically produced, meeting industry needs. The entry barrier for polyester staple fiber is low, and current profit margins are still acceptable. However, if the industry continues to grow, it could lead to the activation of idle or newly built capacity, potentially affecting market stability. Looking ahead, the growth of textile exports may slow down. In 2010, the export growth rate reached 28.4%. But with external demand stabilizing, the ongoing appreciation of the ***, and rising raw material costs, we expect textile exports to grow more slowly in 2011. This could, in turn, put pressure on upstream polyester staple fiber prices. Overall, while the market remains positive, it’s important to monitor both internal and external factors that could influence price movements in the months ahead.