On September 25, it was learned from the China Securities Regulatory Commission's (CSRC) regular press conference that the CSRC has officially approved the listing and trading of short-staple fiber futures on the Zhengzhou Commodity Exchange on October 12.
Polyester short staple fiber (hereinafter referred to as short staple fiber) and PTA belong to the polyester industry chain, with PTA being an important upstream raw material for short staple fiber. Polyester (PET), generated by polymerizing PTA and ethylene glycol (MEG), is then melted, spun, stretched, and cut to produce short staple fiber. Producing 1 ton of short staple fiber requires 0.86 tons of PTA and 0.34 tons of ethylene glycol. Since its introduction to China in the 1970s, short staple fiber has rapidly expanded its market scale due to its wide range of uses and relatively low price, becoming an important raw material for the textile, clothing, and home textile industries.
Short staple fiber can be classified in various ways according to different standards. According to the raw materials, it can be divided into virgin short staple fiber and recycled short staple fiber. Virgin short staple fiber, commonly known as "large chemical fiber," uses PTA and ethylene glycol as raw materials; recycled short staple fiber, commonly known as "small chemical fiber," mainly uses recycled PET bottle flakes as raw materials.
According to different uses, short staple fiber can be divided into three categories: spinning and yarn making, filling, and non-woven. Spinning and yarn making is the main use of short staple fiber, including cotton spinning and wool spinning, with the final use mainly in the textile and clothing industry. Filling mainly refers to its use as a filler in home furnishings and clothing insulation materials, such as bedding, down jackets, sofas, furniture, and plush toys. Non-woven is an extension of the use of short staple fiber, with its usage increasing in recent years. For example, hydro-entangled non-woven fabrics are mainly used in wet wipes and medical fields, while geotextiles, leather-based fabrics, and oilcloth are mainly used in engineering fields.
According to the reporter's understanding, the short staple fiber futures contract to be listed on the Zhengzhou Commodity Exchange will use the currently largest-scale virgin spinning short staple fiber product as its benchmark deliverable.
Data shows that China is the world's largest producer of short staple fiber, with its production capacity and output increasing year by year in recent years. In 2019, the production capacity of short staple fiber was 7.585 million tons, and the output was 6.15 million tons, mainly concentrated in the eastern coastal provinces such as Jiangsu, Fujian, and Zhejiang. There are many short staple fiber production enterprises, and market competition is fierce, with prices determined entirely by the market.
At the same time, China is also the world's largest consumer of short staple fiber, with consumption increasing year by year. According to reports, in 2019, domestic consumption of virgin short staple fiber reached 5.45 million tons, a year-on-year increase of 14.9%, with both consumption and growth rate reaching new highs in recent years. Among them, spinning accounted for 75.2% of consumption, while non-woven fabrics and filling accounted for a combined 24.8%. China's short staple fiber consuming enterprises are relatively small in scale but numerous, totaling tens of thousands.
China's short staple fiber international trade is mainly export-oriented. In 2019, a total of 978,500 tons of virgin and recycled short staple fiber were exported, and 217,800 tons were imported. In recent years, Southeast Asian countries have been actively developing the textile industry, leveraging their labor advantages, leading to a growing demand for textile materials such as short staple fiber, making it an important export market for domestic short staple fiber.
According to industry insiders, in recent years, affected by multiple factors such as raw material costs, changes in supply and demand structure, economic cycles, and export conditions, short staple fiber prices have fluctuated frequently. Currently, PTA and ethylene glycol futures have been listed domestically, allowing polyester industry enterprises to use PTA futures and options to hedge against raw material price fluctuations. However, due to the absence of short staple fiber futures, the sales end lacks effective forward price guidance and hedging tools, leading to increasing calls for the listing of short staple fiber futures.
Market participants say that there are many spinning enterprises in China, most of which are small and scattered, lacking sufficient tools to cope with short staple fiber price fluctuations. The short staple fiber market is prone to concentrated purchasing during periods of significant price fluctuations, with production and sales ratios sometimes reaching 200%, 300%, or even higher, while during periods of price stability, the production and sales ratio is lower, only 40-50%, which is very unfavorable to the stable production and operation of industrial enterprises. The listing of short staple fiber futures will help provide forward price guidance and risk management tools, guiding industrial enterprises to make rational purchases and sales, and facilitating hedging to mitigate risks.
The listing of short staple fiber futures will help to improve the futures product system of the polyester industry chain. Short staple fiber producers can simultaneously hedge against raw material and product price risks, locking in processing profits, and meeting the risk management needs of upstream and downstream enterprises. At the same time, as a raw material for the textile industry, short staple fiber can interact with the currently listed cotton and cotton yarn futures, further enriching risk management tools for the textile industry. Therefore, the listing of short staple fiber futures can leverage the aggregation effect of varieties, improve the ability of the futures market to serve the polyester and textile industries, and further enhance the global competitiveness of domestic polyester short staple fiber enterprises.
