China's ZCE launches polyester staple futures

Market: Petrochemicals
12/10/20

China's Zhengzhou commodity exchange (ZCE) launched its polyester staple futures today with contracts listed from May to September 2021.

This is the third polyester chain product listed in China's futures market, following purified terephthalic acid (PTA) and ethylene glycol (MEG), which listed in 2006 on the ZCE and 2018 on the Dalian commodity exchange respectively.

The ZCE's main contract PF2105 for polyester staple opened at 5,400 yuan/t ($803/t) and reached the upper limit of Yn5,832/t after only 20 minutes of trading. Market participants expect recovering polyester demand and firm feedstock PTA and MEG forward futures to support staple prices. The listing of polyester staple futures offers a new arbitrage tool for manufacturers, consumers and also a hedging tool for PTA , MEG and polyester market participants.

ZCE released a draft of the staple futures contract in August last year but the Covid-19 outbreak delayed its launch by a few months.

China is the world's largest polyester staple producing country with around 8mn t/yr of production capacity. More than 80pc of the producers are in Jiangsu, Zhejiang and Fujian provinces. Polyester staple is generally used in spinning to make polyester spun yarn, which is then knitted or weaved into fabrics, and used for fiber fillings in cushions and sofas.

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China's ZCE launches polyester staple futures

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