On March 2, with the drop in international oil prices the day before, PTA and ethylene glycol finally temporarily eased their rising momentum and experienced a sharp correction, among which PTA futures fell to the limit, and ethylene glycol futures fell to the limit. Futures fell more than 6%.
(PTA Futures 2105)
(Ethylene glycol futures 2105)
As soon as the Year of the Ox has just begun in 2021, polyester raw materials have experienced a sharp rise in a short period of time. This kind of momentum makes people think of the “crazy” market in 2018.
Compared with then, what is the difference between the current situation?
Similar points
The price increase is driven by upstream raw materials
Similar to 2018, polyester prices at the beginning of this year The rise in raw materials is also driven by upstream raw materials.
In 2018, PX prices took the lead in soaring, driving PTA, and downstream polyester manufacturers followed the trend, and raw material prices became out of control;
This year, as the polyester giant’s refining and chemical integration projects have been gradually put into production in the past two years, the production capacity of PX has become no longer as scarce as in the past. The growth of PTA has been restricted, but it has been replaced by B A surge in glycol prices. However, whether it is PTA or ethylene glycol, the price increase will drive up the price of polyester filament.
The market has experienced a long-term downturn
Before 2018, the terminal weaving market also fell into a sustained downturn. At that time, the domestic weaving industry was undergoing transformation and upgrading. The market is flooded with a large amount of low-end production capacity, resulting in overcapacity of conventional gray fabrics, low-price competition, and price wars;
This year’s situation is even more severe, and the market in 2019 was already sluggish. , the new coronavirus pneumonia epidemic in 2020 has brought a devastating blow to the market, and the inventory of gray fabrics by manufacturers has far exceeded previous years.
When things go to extremes, they must be reversed. Market demand has been suppressed for a long time, and there will inevitably be a certain rebound.
Different
Boss Bu is short of funds
March and April of 2018 are rare in the market During the peak season, basically everything is easy to sell, and even if you have money, you can’t buy cloth. The inventory accumulated by the weaving company for many years is wiped out, and you will naturally have plenty of money on hand.
If you have money in hand, you don’t feel panic, and your ability to accept high-priced raw materials will naturally be much stronger. Seeing that raw materials have gone up, at most it makes you feel sad when you buy it, but it rarely happens. There are situations where you can’t afford it.
But this year’s situation is different. Last year, due to the epidemic, terminal demand could not rise, which made it generally difficult to collect receivables in the textile market. In addition, warehouses were full Inventory, the money on hand is naturally stretched, and even if you want to buy more raw materials, you are unable to do so.
The editor also asked several cloth bosses about their views on the surge in raw materials. Most of them said that funds are tight now and they would not dare to take risks unless orders come. Stocking up on too many ingredients.
Future demand is doubtful
Whether the price increase can be sustained is also related to market demand.
In 2018, since the gray cloth inventory of weaving companies has basically been digested, even if the cloth produced by textile companies cannot be sold, it can be used as inventory, and there will naturally be no shortage of demand.
The business of gray fabrics was good at the beginning of this year, but it is far from the state of 2018 when all the cloths in the warehouse were cleaned. Nowadays, most of the cloth buyers are traders, and many of them do not. Received subsequent fabric orders are all prepared in advance, and these fabrics will definitely overdraw part of the future market in advance.
In addition, although overseas vaccines are also being vaccinated, full vaccination will take time, so it is difficult for market demand to return to normal levels in previous years.
The craziness of raw materials in 2018 ended with chicken feathers all over the place. After the increase in raw materials, there was an “avalanche”, and the prices went straight up and down. At the same time, it also brought down the weaving market to a certain extent.
This year’s market lacks the conditions that could support the continued rise in raw material prices like in 2018. After a period of “craziness”, the rise may stop.
For textile companies, whether they have money on hand or not, they must purchase raw materials according to their own needs Act within your ability, the risk of blindly chasing highs is still relatively high. </p
