On July 6, polyester filament prices were raised again! The price of polyester yarn from a No. 1 factory in Tongxiang increased by 100-200 yuan today; the price of polyester yarn from a No. 1 factory in Shaoxing increased by 100 yuan; the price of polyester yarn from a No. 1 factory in Xiaoshan increased by 150 yuan; the price of polyester yarn from a No. 1 factory in Taicang increased by 100-200 yuan today; … The price of polyester filament has increased for the seventh time since the end of the tenth promotion. The price of 10 promotions in 3 months has risen back in just 10 days. Polyester filament is riding a “rocket” this time, with prices rising rapidly. As early as the end of June, the editor had predicted that the promotion would end, and now it seems that it is indeed gone forever.
01 Reasons for the rise in polyester filament
Polyester prices are rising, Mainly affected by the surge in prices of upstream raw materials crude oil and PTA. In recent times, global commodities have experienced a surge, especially international oil prices. After several days of negotiations, OPEC+ still failed to reach an agreement on increasing production. Affected by this, international oil prices rose again. The New York crude oil August contract rose 1.6% to US$76.36/barrel, a new closing high since November 2014; the September Brent crude oil contract rose 1.14% to US$77.04/barrel, a record high in 2018. A new high since October this year.
From top to bottom, PTA has also been affected, and cost pressure continues to rise. Recently, PTA spot processing fees have been relatively high, so it has been hovering on the edge of loss. Currently, PTA’s weekly average operating rate is concentrated at 73.8%, down 1.9% from last week. On July 3, a 2.5 million-ton PTA unit in East China was shut down, and maintenance is tentatively scheduled to last for 2 weeks. With the mainstream supply reduction of PTA, the spot stock is temporarily tight, and it has not been able to effectively accumulate inventory. From the perspective of comprehensive costs and supply and demand, PTA’s short-term downward pressure is limited. From the perspective of polyester itself, polyester inventory has dropped a lot since the April promotion. In fact, today’s inventory is not high, and is actually lower than the “Gold, Three, and Silver” peak seasons in the first half of the year. In terms of profits, due to the rapid rise in costs, polyester yarns did not follow the increase in time, and polyester yarn profits are still in the red. Price increase may be the best way to solve the losses, and it has already achieved initial results. After several rises, the loss space has shrunk, especially POY, which has begun to make profits.
02 Other chemical fiber raw materials are rising
In addition to the price increase of polyester filament, many chemical fiber raw materials have started to rise, such as spandex and nylon, and the increase is even more amazing . Taking 20D spandex yarn as an example, since April 1, the price has increased by 14,500 yuan/ton, an increase of 15.20%. Taking nylon POY as an example, since June 29, it has increased by 650 yuan/ton in one week, an increase of 3.27%.
Spandex prices have risen for more than February, and downstream four-way elastic weaving companies have already Appropriate price adjustments were made to cope with this wave of increases, but in the later period the prices were stable and it was difficult to rise again, and some companies even started to cut prices. It is obvious that the downstream has entered the off-season, orders have begun to drop sharply, and it is difficult to obtain support for price increases when demand weakens. In order to balance supply and demand, many weaving companies sell a lot of products with cash discounts. Although nylon only started to rise at the end of June, the price of its corresponding nylon fabric, the most common nylon gray fabric, has been slowly rising since April. For example, 380T nylon yarn has increased from 2.9 yuan/meter to 3.4 yuan/meter. It is difficult to purchase large quantities of gray fabrics, and there is only a small amount of spot goods on the market. Its price increase, smooth delivery and tight supply are the main reasons for its continuous rise in price. The main driving force is the price of raw materials.
03 polyester filament late trend
It can be seen that for the downstream in the off-season, the rise in raw materials , is not enough to drive up the price of gray fabrics. Only when demand improves will we have more confidence to increase prices. Looking at polyester, the current overall weaving market has shown a weak trend. The products with good sales are elastic fabrics and nylon fabrics. The sales of pure polyester fabrics are average and the demand is not good. Although the costs of weaving companies are rising, inventories are also rising at the same time, and a price war is imminent. At this time, raising prices may mean losing orders and losing customers. This is why most weaving companies have not responded since the polyester promotion ended. Most weaving companies purchase raw materials during promotions. The situation of buying when prices rise but not falling no longer exists. Buying at low prices is the current purchasing strategy of weaving companies. Just-in-time purchases have also been a long-standing strategy of weaving companies, so polyester production and sales are not high under normal circumstances. In other words, it is still difficult for weaving companies to buy into this round of price increases for polyester yarns.
Of course, if polyester filament continues to rise, once the cost bottom line of weaving companies is exceeded, price increases will naturally be inevitable. For example, blackout cloth companies have been the first to issue notices of price increases for gray cloths. Because gray cloths weigh more and use more raw materials, once the raw materials rise, they will have a greater impact on their costs. Therefore, such companies are often the first to be unable to withstand the price increase. Stay under cost pressure. Conventional fabric weaving companies said that if the raw materials exceed 1,000 yuan/ton, gray fabrics will�� is going to rise. So for now, the increase in polyester yarn has reached 600 yuan/ton. According to the current increase, it will soon exceed 1,000 yuan, and the price increase of gray fabric will also follow.
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