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After the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing countries such as Russia held a ministerial meeting on the 1st, the international Oil prices rose significantly that day, with the price of the main Brent crude oil futures contract closing above $70 per barrel for the first time since the end of May 2019.
As of the close on the 2nd, the price of light crude oil futures for July delivery on the New York Mercantile Exchange rose $1.40 to close at $67.72 per barrel, an increase of 2.11%; August delivery London Brent crude oil futures prices rose $1.53 to close at $70.25 a barrel, an increase of 2.23%.
WTI crude oil hit a new high since October 2018, and Brent crude oil stood at the important psychological level of $70. This year Since then, WTI crude oil and Brent crude oil have risen by 39% and 35% respectively.
The price of crude oil has risen sharply, and textile people immediately imagined that the entire industry chain of PTA, ethylene glycol, polyester filament, gray cloth, and fabrics would follow the price increase. Regarding this issue, the editor analyzes it from several levels.
Crude oil prices may continue to rise
First of all, analyze the crude oil itself. If the surge in crude oil can continue to rise, , which will add a lot of confidence to the price increase of the entire industry chain. Historically, oil prices will continue to rise after exceeding $70. As a risky asset, crude oil itself is highly volatile. Once a positive signal for oil prices appears in the market, its rise is often greater than expected. Recently, Goldman Sachs predicts that Brent prices will reach US$80/barrel and WTI prices will reach US$77/barrel in the third quarter. From this point of view, crude oil is more likely to continue to rise in the future.
PTA prices hit bottom Rebound
In terms of PTA and ethylene glycol commodities, the PTA market is currently extremely hot, and futures and spot prices have rebounded. As crude oil continues to rise, costs have increased significantly. Regardless of downstream terminal demand, it will also pave the way for continued increases in PTA and ethylene glycol. In addition, recently, mainstream PTA suppliers have simultaneously reduced their June contract supply, and some major manufacturers have announced maintenance plans. The recent rise in PTA has been driven by the cost side, as well as the market boost from equipment shutdown and maintenance. Taken together, it is expected that PTA and ethylene glycol will continue to strengthen.
Polyester filament promotion activities may be cancelled
In terms of polyester filament, since April to now, polyester filament sales have Ester manufacturers have carried out 7 polyester filament promotions, but despite this, polyester prices remain high and fluctuate in a range. After this round of sharp rise in crude oil and PTA bottoming out, even if the possibility of price increases for polyester filament has weakened due to lack of downstream demand, it is conceivable that promotions may be reduced or even cancelled. In the first 7 promotions, although the production and sales during each promotion were good, in fact there are still many downstream weaving companies that have a wait-and-see mentality in purchasing polyester filament. If they do not stock up or even buy, they may have missed the discount. In the future, the price of polyester yarn will be easy to rise but difficult to fall.
The sales of gray fabrics are improving, and prices may fall back
In terms of gray fabrics, although the recent textile market is close to the traditional off-season, it has A bit “off-season but not off-season”. It is understood that the recent sales of gray fabrics in the market have improved slightly, some specifications are selling well again, and highlight products are appearing frequently. Sales of elastic fabrics such as four-way stretch, T400, and T800 have rebounded, while nylon has become the hottest product on the market, and satin chiffon stands out among simulated silks, etc. This was accompanied by an increase in the operating rate of weaving manufacturers and a decrease in gray fabric inventories. Currently, according to monitoring data from Silkdu.com, the operating rate of water-jet and air-jet looms in Shengze is around 71%, an increase of 2% from last week.
Recently, some manufacturers have Increase the price of gray cloth. Manager Tang of the weaving company told the editor that the shipment volume of elastic fabrics such as T400 has recently rebounded. In the early stage, as the shipment volume decreased, the price was also reduced by 0.05-0.1 yuan/meter. After the recent increase in sales, the price has also been adjusted back by 0.05 yuan/meter. rice. According to the current situation of upstream raw materials, it is planned to increase further in the future.
Although the amplitude of some gray fabrics is very small, the downstream demand is improving. If the upstream raw materials increase sharply, further increase in the price of gray fabrics will become a tacit understanding of weaving enterprises due to cost pressure.
The possibility of price increases in the entire industry chain is also very high. A new round of price increases is coming, and the off-season may not be weak.
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