After the crazy price increase of polyester filament this week, the prices of most enterprises have stabilized, and the price increase of polyester factories has stopped this week.
Polyester price increase has little impact on textile companies
In fact, the current round of polyester price increases has not had a great impact on textile companies. Judging from the average production and sales this week, it dropped by 57% from last week, to around 60%. This also shows that although the price has increased, there are still few people buying it.
The reason is that high prices have caused resistance among textile companies. When researching companies, many bosses reported that foreign trade orders were insufficient this year, so many companies have entered the domestic sales track.
As soon as there are more people, involution will naturally arise, and now e-commerce is very popular, but at the same time it is faced with the problem of small order quantities and low profits, so changes in costs have a great impact on corporate profits.
However, the impact of this polyester price increase is more emotional. In fact, textile workers have basically prepared raw materials last week and the week before last, and the average production and sales in the two weeks were both above 110%.
Cost-driven factors outweigh demand
Although this price increase occurred during the Golden Nine peak season, the demand-side factors are far less than the cost-side. First of all, the market is now in its infancy, and the number of orders in the hands of many companies is actually limited.
More often than not, customers come to sample and inquire about prices, but the emotional factors in this area can indeed have a certain impact on polyester prices, allowing polyester factories to maintain stable prices.
The most intuitive thing is that oil prices have risen sharply this week and have reached the high point of the year, thus driving a wave of price increases in the entire polyester industry chain. However, on Friday (September 8), crude oil prices fell overnight. It also made the PTA futures on that day directly turn green.
The wave of polyester price increases has also come to an abrupt end. Therefore, the current polyester price is still very passive, completely held hostage by costs, and the cost side is held hostage by capital. Polyester factories are in a very embarrassing situation.
Polyester inventory is low but not completely low
Not only are they held hostage by costs, polyester factories themselves are also facing problems. Production reductions are only limited to individual factories. Overall polyester production capacity is still at a high level, around 90%.
Although polyester inventory now seems to be within a reasonable range, according to statistics from Silkdu.com, the overall inventory in the polyester market is now concentrated at 15-25 days; in terms of specific products, POY inventory is at 17-25 days. , FDY inventory is around 15-24 days, while DTY inventory is around 13-24 days.
However, since the raw materials have just been purchased by weaving factories, it is expected that the production and sales of polyester factories will continue to be sluggish from the beginning to the middle of this month, and the consequences of this are self-evident.
However, in the editor’s opinion, the subsequent production cuts of polyester factories may be relatively large, because there have been transportation factors in relevant areas recently, so it is very likely that polyester factories are holding back big moves.
To sum up, polyester inventory is currently at its lowest point in recent years, so manufacturers are not facing much supply pressure, and cost-end support may last until the end of the year in the context of Saudi Arabia’s production cuts.
Therefore, from the current perspective, the price of polyester yarn in early September is easy to rise but difficult to fall, but the overall trend is still following the cost side. If upstream costs increase significantly, in order to alleviate profit pressure, the polyester yarn market is also expected to follow suit.
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