In the past two days, everyone must have still not recovered from the shock of the “multi-national joint production reduction”.
On April 2, local time, “OPEC+” represented by Saudi Arabia unexpectedly announced that it would implement a voluntary oil production reduction plan that will last from May to the end of 2023. Among them, Saudi Arabia and Russia voluntarily cut production by 500,000 barrels. Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman and other countries have successively announced production cuts. The total voluntary production reduction by oil-producing countries exceeds 1.6 million barrels per day.
With cost support, polyester production and sales return to “one-day tour”
The strong are always strong, and the cost support logic of polyester filament reappears.
As the source of the polyester industry chain, changes in crude oil directly affect the price of naphtha, which in turn affects the prices of upstream polyester products PX, PTA, and MEG, thereby affecting the market price of polyester filament. Therefore, no matter how this production reduction develops, judging from the current situation, polyester prices have been deeply affected by it.
On April 3, polyester factories increased their polyester filament quotations one after another, and some factories even made secondary price adjustments in a short period of time, such as:
The price of polyester yarn from a mainstream polyester factory in Jiangsu was raised by 100 yuan/ton in early trading;
The price of polyester yarn from a mainstream polyester factory in Zhejiang was raised by 50 yuan/ton in early trading, and was raised again by 50-100 yuan/ton in the afternoon;
Polyester POY/FDY from a factory in Changle, Fujian was raised by 100 yuan/ton in early trading, and some specifications were raised again by 100 yuan/ton in midday trading;
…
With all kinds of price increase information coming one after another, in the short term, the price of polyester yarn may be easy to rise but difficult to fall. As a result, under the guidance of rising buying sentiment, downstream companies have started replenishment mode. As of April 3, the overall production and sales of polyester yarn have rebounded significantly, and the average production and sales rate of domestic polyester filament sample companies is as high as 159.6%! However, this high production and sales did not effectively continue, and the value immediately dropped sharply to 33.4% the next day (April 4).
As terminal orders continue to be weak and rising raw material prices have caused continuous expansion of cash flow losses for weaving companies, they have to use time differences to generate certain cash flow profits with relatively low raw material purchase prices and higher finished product sales prices, thereby maintaining the business normal operation.
Green development, keen on environmental protection, recycling and natural fibers
As we all know, textiles can be divided into two types: natural fibers and chemical fibers. However, natural fibers are limited. To meet demand, petroleum fibers such as polyester, nylon, and spandex must be obtained from petroleum. Relevant studies show that the textile industry has become the second most polluting industry in the world after the oil industry, emitting 17 tons of greenhouse gases for every ton of textiles produced. It is predicted that by 2050, the fashion industry will consume more than 30% of the global carbon budget.
Through exhibition research, we found that many fabric dealers lamented that whether it is a domestic exhibition or a foreign exhibition, customers have shown great interest in environmentally friendly recycled and natural fiber fabrics. Especially foreign customers, inquiries and price inquiries have increased significantly.
An outdoor functional fabric company focuses on promoting a fabric product that spans scenarios and seasons. This fabric is made of fully recycled yarn, which not only reduces the carbon footprint, but also breaks the limitations of fabric use. Highly waterproof and moisture-permeable technology and ultra-high color fastness make the garments weatherproof.
Another company integrating industry and trade revealed that the original inventory days of cotton yarn in the weaving factory were maintained at around 30 days. Since late March, the inventory days have been adjusted to around 50 days, with an additional inventory of about 20 days. This company mainly focuses on foreign trade orders. The main reason for this adjustment is that the supply continues to be tight, which has led to rising prices of some specifications of cotton yarn, and there are even queues for goods in short supply.
As the process of sustainable development continues to advance, the concept of green textiles is becoming increasingly popular. Therefore, it is inevitable that environmentally friendly recycled and natural fibers are sought after.
Postscript:
At present, with the fundamentals remaining unchanged, polyester filament prices are relatively resilient. Most textile companies stated that they will develop in the direction of environmental protection and differentiation in the future, such as developing new interwoven varieties based on polyester, increasing the proportion of environmentally friendly recycled and natural fibers, etc.
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