Crude Oil Prices Drives Gains Across the Polyester Chain

On December 9, international crude oil futures prices increased, with a notable rise in the morning session, followed by a slight consolidation in the afternoon before closing significantly higher. The gains were fueled by stronger oil demand expectations in China, along with a geopolitical risk premium, particularly following the collapse of the Syrian government. WTI crude futures for January 2025 rose by $1.17, settling at $68.37 per barrel, a 1.74% increase, while Brent crude futures for February 2025 gained $1.02, closing at $72.14 per barrel, marking a 1.43% rise.

The same day, the Chinese Politburo unveiled plans for more proactive fiscal policies and a moderately loose monetary policy for the upcoming year. This announcement boosted market sentiment, fostering confidence in a stronger oil demand outlook and contributing to the positive oil price movement.

As global markets respond to these policy developments, the Hang Seng Index surged by 2.76%, while the Nasdaq Golden Dragon China Index jumped more than 10%. The offshore yuan strengthened briefly above the 7.26 mark against the dollar, reflecting market expectations that monetary easing will foster economic recovery.

This favorable macroeconomic climate has resulted in broad gains across commodity markets, including the polyester chain. The rebound in crude oil prices has directly impacted PET production costs, pushing up prices across the polyester value chain. Additionally, China’s fiscal and monetary policies are anticipated to stimulate both domestic consumption and industrial production, driving demand for polyester products, particularly in textiles and packaging. This growth further supports the continued upward movement in polyester chain prices.

In conclusion, with oil prices rising and China’s fiscal and monetary measures boosting economic activity, the polyester chain is benefiting from a favorable market environment, with increased demand in key industries fueling price gains.

References

1. Reuters(December 10, 2024)|Oil prices ease, but China policy stance checks losses

2. Financial Express(December 10, 2024)|Crude jumps 1% on continuing concerns in Syria; Check petrol, diesel prices on 10 December 2024 in Mumbai, Chennai, Surat and others

3. CCF(December 10, 2024)|China Heavyweight Conference Sets the Tone, Leading to Widespread Increase in the Polyester Chain

4. Reuters(December 10, 2024)|China's November crude oil imports recover, other commodities stay strong: Russell