In late January, as the COVID-19 epidemic spread in China, the decline in China’s crude oil demand triggered a sharp drop in international crude oil prices. Coupled with the increase in U.S. crude oil inventories, the Oil prices have been hovering at the bottom. Recently, Saudi Arabia advocated that OPEC+ believe that expanding production cuts may be the next decisive factor affecting oil prices, and suggested cutting production by 1.2 million barrels per day. The “suspense” of production cuts has affected the market. Boosted by positive news, international crude oil has bottomed out and rebounded.
Crude oil, as a crude oil product in the polyester market, has a cost-promoting effect on polyester products. While crude oil rebounds, polyester filament follows closely behind, buying the bottom. rebound.
In the early morning of the 4th, ethylene cracking occurred at the plant of South Korea’s Lotte Chemical in Seosan, Chungnam The device exploded and the earthquake was strong. There are currently no casualties. It is reported that the plant has a production capacity of 1.1 million tons of ethylene, 550,000 tons of propylene, 190,000 tons of butadiene, 580,000 tons of styrene, and 730,000 tons of MEG.
The explosion at a Korean chemical plant has strengthened confidence in the price increase of some polyester filaments. After falling continuously, polyester filament finally rose!
The price has increased! !
On the 3rd, some mainstream polyester manufacturers took the lead in raising prices. Among them: polyester FDY, another large factory in Tongxiang, increased by 50-100; a mainstream factory in Jiangsu FDY rose 100…
On the 4th, some mainstream manufacturers continued to increase their quotations, including: FDY from a factory in Shaoxing The glossy part rose by 50; DTY from a factory in Zhejiang rose by 50; polyester yarn from another factory in Zhejiang rose by 50-100…
In terms of specific manufacturers: Tongkun rose by 100-150; Hengyi rose by 50-100; Xinfengming rose by 50-100; Rongsheng rose by 50-100; some specifications of Shenghong rose by 100…
On the 5th, some mainstream manufacturers continued their upward trend in quotations, among which : Polyester yarn FDY and DTY from another large factory in Tongxiang rose by 50-100; FDY from a factory in Shaoxing rose by 50-100; FDY from another factory in Shaoxing rose by 50-100; polyester yarn from another factory in Zhejiang rose by 50-100…. ..
Although the prices of some polyester yarns have been rising for several days and seem to have the momentum to “come back”, we must not forget the fundamentals of polyester yarns. Still not satisfactory.
The fundamentals of polyester filament are weak and there is still a price but no market
Starting from the Spring Festival, upstream polyester manufacturers are still operating at high load, and polyester yarns are continuously being produced. However, the market suddenly encounters the “black swan” of the new coronavirus epidemic. Downstream weaving manufacturers will open the market from the original eighth day of the first lunar month. After the delay to January 10th, the vast majority of manufacturers opened the market after January 21st. However, due to the lack of workers, the operating rate of manufacturers was seriously insufficient. According to statistics from China Silk City Network, during the first period of the market opening , the operating rate of weaving manufacturers is only about 25-30%.
Due to the serious shortage of operating rates, weaving companies had more or less problems before the year Due to the shortage of raw materials and the impact of the epidemic, orders were not placed as intensively as in the past, so the demand for raw polyester filament decreased. As polyester stock continues to accumulate but demand is insufficient, the price has been in a downward channel, resulting in a situation of “price but no market”.
Compared with polyester prices a year ago, polyester filament FDY150D dropped by about 575 yuan/ton, POY150D dropped by about 620 yuan/ton, and DTY150D dropped by 500 yuan/ton. About yuan/ton.
Why will polyester yarn rise this round, except In addition to the boost from crude oil and factory explosions in South Korea, the price increase of polyester yarn may also contain speculation elements.
Hype
For polyester filament, the current inventory is already “skyrocketing”, and at this stage Judging from the situation, the pressure to destock is not small, and the current price can be said to have little room for decline, which is also very distressing for polyester manufacturers. Now that there is a hot spot suddenly, we can take the opportunity to increase the price and stabilize the current situation of polyester yarn, which may also help with destocking in the future.
How long can this wave of price increases last?
Maybe only a few days, maybe it can last a long time.��, but it is actually a bit difficult for polyester prices to maintain an upward trend for a long time based on its current status!
Inventory
As far as the polyester yarn itself is concerned, it is its own inventory problem. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 32-42 days; in terms of specific products, POY inventory is around 26-32 days, FDY inventory is around 27-33 days, and DTY inventory is around 27-33 days. to about 33-42 days.
It can be said that the inventory of polyester yarn has reached a high level in recent years. It is difficult to effectively remove the inventory in a short period of time!
PTA
As the main raw material of polyester filament, PTA plays a role in cost support for polyester filament. However, PTA has been declining since the second half of last year, especially during the delayed resumption of work period, when the decline was even more severe. As of now, the internal price of PTA is around 4,230 yuan/ton, which is a decrease of about 570 yuan/ton compared with the previous year, a decrease of nearly 12%.
PTA’s social inventory is currently 2.344 million tons Nearby, high inventory is one of the important factors dragging down its price. From the perspective of inventory, the possibility of PTA prices falling in the future is still high. The unstable price of PTA naturally makes it difficult to provide effective support for polyester filament.
Weaving
In terms of weaving, the current operating rate of weaving enterprises has improved significantly compared with before, and is around 70%. However, due to the outbreak of the epidemic, inventory in the clothing industry has once again been overstocked, spring clothing has been severely understocked, and the return rate has been low, which has also had an impact on weaving companies. On the other hand, the epidemic is now breaking out around the world, which has also had an impact on textile exports.
Although weaving companies are receiving orders one after another, the current operating rate has not reached the level of the same period in the past. In addition, there are still many uncertainties in orders, resulting in overcapacity in the later period. It may happen again, so most weaving companies still wait and see in terms of their demand for raw materials.
Some polyester filaments are taking advantage of the situation to increase their prices. , in fact, it can be considered “very reluctant”. However, whether the rally can be maintained depends on whether various factors provide strong support. Looking at the current situation, the epidemic has begun to spread around the world, which has had a certain impact on textile and clothing exports. In addition, the sales of terminal clothing in the spring are poor and the backlog of goods is serious. For a time, the transmission to the weaving aspect may not be good, and the weaving industry is sluggish. It has a direct negative impact on polyester yarn.
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