Brent crude prices have nearly doubled since early April amid an unprecedented 9.7 million production cuts by OPEC, Russia and allies barrel/day. After OPEC+ countries agreed to extend the implementation period of the production reduction agreement, international oil prices continued to rise, once exceeding the US$40 mark.
However, the good times did not last long, Saudi Arabia, Kuwait and the United Arab Emirates They said they did not intend to extend their 1.18 million barrels per day voluntary additional production cut beyond the end of June. Affected by this, international oil prices fell significantly on June 8, and then began to fluctuate.
As of the close of the day, the price of light crude oil futures for July delivery on the New York Mercantile Exchange fell by US$1.36 to close at US$38.19 per barrel, a decrease of 3.44%. . London Brent crude oil futures for August delivery fell $1.50, or 3.55%, to close at $40.80 a barrel.
Under the influence of the decline in international oil prices, the price of polyester raw materials began to decline.
PTA futures, as of the close of June 9, the closing price of the main 2009 contract of PTA futures was 3746 points, down 18 points or 0.48% from the previous trading day.
As for ethylene glycol futures, as of the close of June 9, the closing price of the main 2009 contract of ethylene glycol futures was 3,709 points, down 58 points or 1.54% from the previous trading day.
Before this turn of decline, the polyester industry chain experienced a long-term rise.
Driven by the sharp rebound in international oil prices and the slight improvement in domestic trade orders, Since April, the prices of various products in the polyester industry chain have increased significantly.
Among them, the price of PTA increased by 565 yuan/ton, and the price of ethylene glycol increased. 600 yuan/ton, the price of polyester FDY150D increased by 1,300 yuan/ton, the price of polyester POY150D increased by 1,015 yuan/ton, and the price of polyester DTY150D increased by 350 yuan/ton.
The rebound in polyester raw material prices in the previous stage was mainly driven by international oil prices. Goldman Sachs believes that the current rebound of crude oil is too fast, and the world’s crude oil still has strong pressure to destock. Faced with the uncertainty of economic recovery and the resumption of shale oil production, oil prices may fall again in the short term, and Brent oil prices are expected to fall to US$35/barrel in the next few weeks. This logic also applies to the polyester industry chain. However, in the absence of a complete recovery in the terminal market, there are considerable hidden dangers in the sharp rise in the price of polyester raw materials in a short period of time.
From the perspective of gray cloth inventory, according to data monitoring from China Silk City Network, the average inventory of weaving companies in Jiangsu and Zhejiang is 42-43 days ago, and is in an increasing range.
In terms of polyester inventory, from China Silk Capital Network According to statistical data, the overall inventory of the polyester market is now concentrated at 22-32 days; in terms of specific products, POY inventory is around 13-20 days, FDY inventory is around 15-21 days, and DTY inventory is around 23-33 days about.
It can be seen that although after the wave of market prices some time ago, both polyester inventory and gray fabric inventory have declined slightly, but compared with previous years, the current inventory situation of polyester factories and weaving enterprises is still It is not optimistic, especially for weaving companies, where inventory pressure is more obvious.
Where will polyester prices go?
On June 9, when the prices of PTA and ethylene glycol began to fall due to the impact of oil prices, polyester filament still showed a slight decline. Of course, there is a lag in polyester price adjustment, but more importantly, although polyester prices are affected by changes in upstream raw material prices, they also have their own set of logic.
On the one hand, it is because of profits. From the recent profit trend chart of various polyester filament products, we can see that after mid-March, polyester profits began to fluctuate and decline. In early April, as the prices of raw materials and polyester yarns increased, profits improved. But it has started to fall again recently.
The second reason is the concentration of production capacity. Polyester filament production capacity is nearlyIn recent years, it has been concentrated in a few large factories, and this year this concentration has been accelerated due to the epidemic. This concentration of production capacity gives leading polyester companies a strong pricing power over the price of polyester filament. Therefore, we often see situations like “raw materials rise, polyester filament rises, raw materials fall, but polyester filament does not fall.”
The third is because of the way weaving companies purchase raw materials. As the price of polyester filament has fallen too sharply in the past two years, weaving companies have insufficient confidence in the price of polyester. Therefore, they mostly choose to buy and use raw materials as they go, and fewer companies choose to stock up on raw materials for a few months than before. Under such circumstances, whether raw materials rise or fall will not affect the strategy of most weaving companies to purchase raw materials.
Based on the above points, in the short term There are still no signs of improvement in the downstream demand for domestic polyester filament, and because crude oil is bearish, the probability of price drops for raw materials such as PTA and ethylene glycol is relatively high. Therefore, from both upstream and downstream perspectives, the possibility of polyester yarn rising Not big; but on the other hand, the profit of polyester filament has been compressed to an extremely low state, and polyester factories are obviously in a price support mood. Therefore, in the future, polyester prices may still be mainly stable. If there is a situation like this, A big drop like the one at the beginning of the year is no longer likely.
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