International oil prices rebounded strongly last night, the first strong rebound in seven trading days. As of the close on the 23rd, the October contract of NYMEX WTI crude oil futures closed at US$65.64/barrel, an increase of 5.63%; the October contract of ICE Brent crude oil futures closed at US$68.75/barrel, an increase of 5.48%.
However, polyester filament went in the opposite direction. There was a one-day profit promotion on the 24th, and a wave of promotions just ended last Friday. The decline is generally 200-400 yuan/ton, far exceeding the previous decline of 50-200 yuan/ton. This wave of profit-sharing promotions for polyester yarns to stimulate consumption has not been as effective as expected. The production and sales of individual manufacturers are above flat. Most buyers are mainly for rigid needs, and the mainstream production and sales are 73.4%.
A large factory in Tongxiang has a discount on polyester yarn today, with the price reduced by 300 yuan;
Another large factory in Tongxiang has a one-day sale on polyester filament today, with a discount of 200-400 yuan; a large factory in Taicang has reduced the price of polyester filament by 300 yuan today… Recently, with the decline in crude oil and PTA prices, the cost of polyester filament has increased. Loose, profits rose slightly. Specifically, the profit of FDY has risen to 119 yuan/ton; the profit of POY 150D has rebounded, and the current profit is 389 yuan/ton; the profit of DTY 150D has rebounded, and the current profit is 344 yuan/ton. At present, mainstream polyester products are relatively profitable, and profit-sharing promotions can bring a certain amount of sales. For polyester manufacturers, it is important to be able to produce a small amount of goods. In particular, the recent changes in upstream and downstream production capacity may increase the purchasing desire of weaving manufacturers.
01
Polyester filament rigid demand still exists
August is the peak period for new downstream texturing and weaving operations, especially the recent addition of 10,000 looms and 200 eddy current textile machines in Northern Jiangsu. The deployment of this part of production capacity will significantly increase the demand for polyester filament. In addition, with the arrival of September, it is inevitable that the market will improve. The demand for autumn and winter clothing fabrics, knitted fabrics and other fabrics will gradually increase, while the rigid demand for polyester filament will still exist.
02
Polyester manufacturers reduce production, some varieties or supply is tight
It is reported that some varieties of polyester filament in polyester factories are currently at a loss, and mainstream polyester factories continue to implement the second round of production reduction plans. The current production capacity involved in parking and production reduction is 4.536 million tons. The market outlook does not rule out that other domestic companies with relatively high inventories also have production reduction plans. It is expected that after the load reduction, the industry output will be at the level of 1.09-1.1 million tons, and the load will be below 86%. The output of the domestic polyester industry will decline significantly, and the supply of a small number of varieties may be tight. Polyester factories are reducing production while taking into account the current particularity to allow downstream texturing and weaving companies to stabilize their expectations. Therefore, polyester filament will be activated for another day. Discount model of profit promotion.
But every promotion is almost the same. It’s just a one-day tour. In the final analysis, the demand is not enough and the production capacity is too much. In the long run, negative factors for polyester filament still exist.
Overseas demand for polyester filament weakens, and new production capacity is excess
According to data, polyester filament yarn is expected to add 3.55 million tons of new production capacity in the second half of the year, and the new production capacity is mainly concentrated in Jiangsu and Zhejiang. . In the first half of the year, 800,000 tons of new production capacity were added. In August last year, a 600,000-ton unit of Hengke was put into operation, and yarn production continued until April this year. Overall, the new polyester filament production capacity in 2021 is expected to be 4.95 million tons, a year-on-year increase of 13%. above. In recent years, the expansion of polyester filament production capacity is actually to meet global demand. But no one expected that the outbreak of the epidemic would severely shrink global demand. Since polyester filament exports only account for about 6% of production, domestic demand for textiles and clothing has also been affected by the epidemic, and the growth rate of filament demand has dropped. Not only that, even if there is demand overseas, the freight and costs are very high, and the profitability of polyester yarn is not good.
Downstream weaving companies’ purchasing desire and enthusiasm to start production All dropped
Looking at the current situation of the downstream weaving gray fabric market, it has entered the end of August, but the off-season has not faded away, and the market has even become much deserted in the past week. In particular, the operating rates of looms in the textile clusters of Jiangsu and Zhejiang have shown a downward trend, and the operating rates are insufficient, and the demand for polyester filament has further weakened. Of course, there are still hot-selling products, but the polarization is serious, and those weaving companies with good business simply cannot consume the production capacity of polyester factories. At the same time, the profits of most of the weaving manufacturers that can sell goods are quite low, and many of them sell at breakeven. Insufficient liquidity in hand is a common feature of today’s weaving manufacturers. Without sufficient funds, the willingness to purchase polyester yarn and the enthusiasm to start production will decline. Although crude oil has rebounded, in the medium to long term, as time goes by, the crude oil supply gap gradually narrows, and it is expected that it will gradually enter a storage accumulation cycle after January next year, and crude oil will most likely still oscillate and run weakly. In addition, as the overseas epidemic continues, the number of new confirmed cases of COVID-19 every day is still huge, which has a great suppressive effect on the market outlook.
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