Just now! PTA prices have increased again! After experiencing a sharp decline at the beginning of the month, last Monday (July 18), the price of PTA futures began to soar, rising by 6%, close to reaching a daily limit. And just today, a Monday, the price of PTA futures rose again, up by %. What is going on!
Is PTA really OK?
The contradiction between PTA supply and demand is prominent
After the price increase of PTA last week, polyester factories increased their production and sales, but the good times did not last long. After three days of high production and sales, production and sales fell again, and because the weaving market is in the off-season of the industry, it is expected that It seems that polyester factories have increased their production volume, but in fact it is just a transfer of inventory.
At the same time, the terminal clothing industry is in a sluggish market. After the global epidemic in 2020, the focus of social consumption has changed. The proportion of clothing products is not as high as other daily necessities. Therefore, the order volume of the terminal clothing industry has decreased. Although there is not much PTA inventory now, due to The end-use textile consumption demand is shrinking again. The end-use is not good and it is difficult to significantly increase the polyester load. However, new PTA production capacity is constantly being put into production. The annual new production capacity is close to 10 million tons. Therefore, the contradiction between supply and demand is prominent and PTA prices will be hindered.
Will the increase in PTA affect the price of polyester yarn? The editor does not think so. There are three main reasons that do not support the continued rise in polyester prices:
Crude oil has more negative consequences than positive benefits
The market for crude oil is now completely fluctuating at the information level. It rises sharply and plummets at other times. This is also the direct cause of the fluctuations in PTA prices.
After a sudden rise last week, crude oil prices have fallen again. The main factor preventing oil prices from rising again is the sudden slowdown in the global economy. The recent response to oil prices will come from the current high demand level. Moreover, the international political situation, the Federal Reserve’s interest rate hike, the Russia-Ukraine war, and global inflation all affect the price of crude oil. Faced with such a complex international situation, for crude oil to truly stabilize, it may have to wait until the Russia-Ukraine war subsides and the international situation stabilizes.
Polyester factory inventory transfer
The production and sales data of polyester factories last week were indeed impressive, but is this impressiveness really due to improved market conditions? no! This wave of destocking only took advantage of the downstream purchasing mentality of “buy up but not down”. The real market conditions have not recovered. Although it seems that the inventory of polyester factories has dropped significantly, in fact, these inventories have been transferred to weaving companies.
The overall polyester inventory in the market is still high, and it is foreseeable that the production and sales data of polyester factories will fall into a downturn again. Fortunately, the current load of polyester factories is not very high, and the inventory growth rate will not be very fast in the future. Mainstream manufacturers will maintain regular production cuts, and it is difficult for the overall market supply to increase significantly.
It is difficult to hide the weak situation in weaving
This week is the last week of July. After this week, the August market is about to arrive. Generally speaking, preparations for “Golden Nine” orders will appear in late August. However, according to corporate feedback, although some autumn and winter new models are gradually being sampled, Although there are very few actual orders placed, if these orders are placed, there may still be hope for the “Golden Nine”. Under this circumstance, weaving companies still mainly purchase raw materials based on rigid needs.
The current weaving market is still in the off-season, and orders are limited. Therefore, the factory operating rate is at a low level. The weaving operating rate in Jiangsu and Zhejiang is around 58%. The market situation still needs to wait. From the current market point of view, the demand is still in a weak stage. The inventory of woven gray fabrics has increased again. Judging from the current market situation, the inventory is still expected to rise again next week. And since the temperature is not as hot as before, the operating rate is likely to increase, and the inventory may continue to rise.
To sum up, although PTA futures are strong at around 5,000 points and refuse to fall down, the boosting effect on polyester yarns is very limited. The negative factors far outweigh the positive factors. Even if some specifications of polyester yarns are very popular, there may be some improvement. However, the prices of most conventional varieties of polyester yarns are still running at a weak level.
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