During the Spring Festival holiday in the Year of the Tiger, crude oil prices were even more powerful. On February 4, the price of WTI crude oil exceeded US$92 per barrel for the first time. At the same time, Brent crude oil exceeded US$93 per barrel, setting a record of seven years. A new high in many years.
While everyone is spending the wonderful Spring Festival holiday together, what exactly happened that caused international crude oil to skyrocket?
First, supply-side tensions have boosted oil prices. Since this week, winter storms have brought freezing rain and snow to many states in the central and eastern United States, causing increased local demand for heating oil. On the other hand, the market is worried that bad weather will affect shale oil production in Texas, the oil-producing center of the United States.
In addition, some OPEC members are struggling to meet current monthly production targets and lack the spare capacity needed to further increase production, which has also worsened the gap between crude oil supply and demand. In addition, tensions between Russia and Ukraine have also increased concerns in the crude oil market.
Will the surge in crude oil boost the polyester market after the year?
The author’s point of view is that in the short term, there is no reason in the world that the buns will not rise even if the flour rises. Therefore, in terms of absolute prices, polyester filament will be affected by such strong cost-side support after the festival to further increase.
However, whether polyester yarn can continue to ride on the cost tailwind, we need to consider this issue from many aspects. First of all, judging from the experience of the past few years, excluding the impact of the epidemic in 2020, the polyester industry chain A “good start” is no longer a rare thing. What is really worth paying attention to is whether the “Golden Three” can bring the orders that should be expected in the traditional peak season. From the current point of view, the order volume in the hands of textile companies is due to the Spring Festival being brought forward this year. It can be maintained until about March, so whether the demand for the “Golden Three” can be advanced will determine the sustainability of the increase in polyester prices.
Secondly, after nearly a month of super long holidays in the textile market, polyester factories are still producing, and there is inevitably the risk of overstocking. Years ago, because downstream weaving companies had a conservative attitude towards the future market and did not purchase too much, polyester The continued sluggish production and sales have resulted in polyester factory inventories failing to achieve a good destocking effect for a long time. Although polyester factories adopt the method of maintenance and production reduction to neutralize, the maintenance and restart overlap in the process, which greatly reduces the effect of production reduction, and the risk of excessive supply still exists.
Finally, we need to consider that the overseas epidemic is still a “ticking time bomb” and the current high shipping costs are still at a high level. These will affect the placement of foreign trade orders. At present, WTI and Brent crude oil have exceeded the $90 mark. Although many financial institutions predict that international crude oil will break through the US$100 per barrel mark, it remains to be seen whether it can continue to break through.
All in all, the price increase caused by the upward movement of raw material prices, the sustainability of the increase depends more on whether there is sufficient demand from the downstream. However, polyester and other textile raw materials still have the same slight upward trend after the holiday as in previous years. The textile market Construction will also resume on a large scale today, and the upside is expected to be adjusted immediately based on demand trends.
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