On May 24, the polyester industry was filled with news of freight price increases. Due to the increasing costs, polyester factories have increased the price of polyester product loading fees. The increase range is 5-10 yuan/ton, mainly led by factories such as Tongkun, Rongsheng, Kaishi, Hengyi, and Senkai. Open up.
Unexpectedly, while the price of raw materials is high, the loading fees of polyester factories have also increased! In the near future, polyester filament prices may rise again.
International crude oil has strong support
First of all, looking at the source of crude oil, international oil prices will continue to be strong, supported by geopolitics and supply demand. Bank of America Global Research said oil prices should continue to be supported even as recession risks rise, with low oil inventories and shrinking OPEC spare capacity supporting their forecast for an average Brent crude oil price of $102 in 2022-2023, while It could exceed $120 in the short term.
Low inventory levels, limited spare capacity and recovering demand in emerging markets after the epidemic have combined to push Brent crude to a high of $120 in the coming months. With crude oil at a high level, it may be difficult for polyester derivatives such as PTA and polyester filament to survive without rising.
PTA maintenance increases or may continue to remain high
As an important raw material for polyester filament, PTA also determines the price trend of polyester filament. Recently, the overall operating load of domestic PTA devices is still low, at around 72.75%.
Last weekend, the load of two sets of 7.2 million-ton PTA units in East China dropped to around 80%; the load of a 2.5-million-ton PTA unit in South China dropped to 50% yesterday, and the impact is expected to be around 3 days; a 325,000-ton PTA unit in Central China is planned Maintenance will be carried out today, and the restart time is to be determined; a 2.5 million-ton PTA unit in East China is scheduled to start maintenance today, which is expected to be around 2 weeks.
In recent times, the polyester load has been recovering slowly, and the inventory of polyester raw materials is relatively low. In addition, the strong cost performance still supports the PTA market price. Therefore, PTA will continue to remain high or rise in the future.
Polyester yarn has high cost pressure and limited profits
From the perspective of polyester filament itself, its price is difficult to fall back. Although there are calls for promotions in polyester factories as the end of the month approaches, considering the current long-term cash flow losses of most specifications of polyester filament yarns and the cost pressure, it is expected that the profit margin will be limited and the profit distribution period will not last long.
In addition to the cost pressure caused by strong raw material prices, polyester filament yarns are still facing cost burdens in other aspects. Rising electricity costs, rising transportation costs, etc., have led to an increase in processing fees. It is precisely because of these cost pressures that polyester factories have issued notices of increases in loading fees.
This seemingly inconspicuous fee has increased downstream costs, and the meager profits have been squeezed again. Although the increase of 5-10 yuan/ton may not seem like much, it is a considerable expense over time. Today’s weaving companies, although the order volume of gray fabrics has improved compared with last month, the price is slowly falling, but the raw materials have already increased by more than 1,000 yuan/ton compared with last month. It is conceivable that the profits of weaving companies are really at stake. So, where will this transportation cost end up? Weaving factory? Trader? Or the end consumer?
Judging from the current situation, it seems that only weaving companies are footing the bill. Although the price of polyester yarn has returned to a high level and the sales atmosphere in the downstream gray fabric market has also improved, it has not been able to drive the price of gray fabrics. On the contrary, the price of gray fabrics is stable but falling. Especially the larger the quantity, the greater the discount. In the first three months, under the influence of the epidemic, weaving companies were obviously overstocked. Now the market has finally relaxed, and everyone is scrambling to get rid of warehouses. Therefore, price wars are everywhere, prices in the entire market are chaotic, and many manufacturers have to follow the trend. Offers.
Judging from the current situation, it is impossible for weaving companies to increase the price of gray fabrics. And in the future, the traditional off-season is coming, and manufacturers are at risk of being overstocked again. At that time, it may be more difficult to increase the price of gray fabrics.
Cost pressure is still a major problem faced by polyester filament yarn and downstream weaving plants. Under the influence of the early epidemic, demand in the domestic market is also shrinking. If raw material prices remain high, the weaving industry will still consider reducing operating loads to ease inventory and financial pressures. Production costs will increase, and the market will fall into a vicious cycle.
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