The COVID-19 epidemic has become the trigger for the recent avalanche of global financial, futures and crude oil markets, and the market has entered a new round of economic depression. Under the impact of the epidemic, the entire industrial chain of the textile industry has been greatly affected. The rule that everyone in the industrial chain prospers and everyone loses is clearly demonstrated.
Crude oil prices continue to drop around US$20, which makes it difficult to form effective cost support for futures markets such as PTA and ethylene glycol. The upstream cost support collapses and the injuries are most obvious. The ones are downstream polyester manufacturers.
Among polyester products, polyester filament products are the first to be affected. Especially in terms of profits, the price profits of various polyester filament products have been declining recently. Among them, FDY products and POY products have fallen into a loss dilemma. As of April 1, the loss margin of FDY products was 94 yuan/ton, and the loss of DTY products was 94 yuan/ton. The loss space is 144 yuan/ton.
Finally, polyester manufacturers support Can’t stand it anymore!
On April 1, news came out: A polymer spinning filament factory in Shaoxing began to reduce production by 300 tons/day, and the product involved was FDY.
Polyester filament is the most direct raw material for gray cloth , can be said to be one of the important indicators of the direction of the textile market. In this special period, every move has attracted the attention of the downstream weaving and fabric markets.
Since the resumption of work after the year, the load of polyester manufacturers has been effectively increasing. At the same time, new equipment has also been put into operation in the near future. As of March 27, the comprehensive load of polyester was around 84%, of which the load of polyester filament remained around 74.7%. Compared with the same period in previous years, the load was only about 5% lower. However, at the same time in previous years, the operating rate of the weaving market was much higher than now. It can be seen that the load of polyester yarn is still at a high position.
From a deeper analysis, in fact The pressure faced by polyester manufacturers is not small now, but due to various considerations, polyester manufacturers have been slow to take action. However, now that some manufacturers have taken the lead in issuing production reduction notices, will other manufacturers also join the ranks of reducing production and reducing burdens?
As far as the editor’s personal opinion is concerned, there is a high probability that it will!
Downstream demand is poor, polyester production and sales continue to be sluggish
In fact, after the New Year, the production and sales of polyester yarn have been poor. The market has only exceeded 100 once, and it has basically remained around 30-50%.
The most direct reason for the downturn in production and sales , that is, downstream demand has shrunk severely.
In the past two days, news about “holidays” and “production cuts” have been everywhere. European and American countries are important export regions for my country’s textiles and clothing. Due to the accelerated spread of the epidemic, overseas companies have insufficient operations, shortages of international transportation capacity, and major changes in supply chain timeliness and costs. Many foreign trade orders have been canceled and delayed. Foreign trade companies are facing Huge pressure, and even the risk of bankruptcy or closure.
As for terminal clothing, the clothing industry itself has begun to decline in recent years, and inventory is full. As a result, the ordering model has always been “small batch, multi-batch” Lord. The epidemic has directly lengthened the “cold winter” of the garment industry and has had a significant impact on weaving companies.
The downturn in clothing and weaving has naturally reduced the popularity of the printing, dyeing and finishing industries. Due to the rising inventory and financial pressure on enterprises, both weaving companies, printing and dyeing companies, and other companies have begun holiday production reduction plans. The demand for raw materials has shrunk directly.
The fundamentals of polyester yarn are weak. The price points directly to the “cabbage price”
The weakening demand will have the most direct impact on the continuous accumulation of polyester inventory. According to the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 34-45 days; in terms of specific products, POY inventory is around 28-35 days, FDY inventory is around 29-36 days, and DTY inventory is around 29-36 days. to about 34-45 days.
Since the Spring Festival, the phenomenon of polyester stockpiles has become more and more obvious, especially now, it has reached a high level. Generally speaking, weaving manufacturers have regular replenishment operations at the end of the month. However, this year’s market is sluggish, and production and sales are difficult to reach the same period in previous years. As a result, polyester manufacturers have poor destocking effects, and polyester yarns will most likely still be in overstocked inventory in the coming days. cycle.
At the same time, the price of polyester filament has recently fallen below the bottom price of polyester manufacturers, but it is difficult to have good support to bottom out the price. . It can be said that the current price of polyester yarn is probably the same as the price of cabbage. Specifically, the price of FDY150D is concentrated at around 5,150 yuan/ton, the price of POY150D is concentrated at around 4,700 yuan/ton, and the price of DTY150D is concentrated at around 6,900 yuan/ton.
In fact, since last year, polyester filament The price has been in a downward trend. At the end of the year, in order to stabilize the price of polyester filament, several major polyester manufacturers began to implement the “production restriction and price guarantee” measures during the Spring Festival, which kept the price of polyester filament stable during the Spring Festival. The current price of polyester yarn is already based on the early low price. It is reasonable for polyester manufacturers to adopt production reduction measures to protect the price.
So, after the polyester production is reduced , what impact will it bring?
1. Go to the library
Gather After ester manufacturers reduce production and reduce production capacity, the most obvious effect is that inventory growth is slow. Then, under the condition that basic demand in the downstream weaving market still exists, polyester manufacturers will achieve a significant destocking effect. At present, the inventory of polyester filaments of polyester manufacturers has exceeded the normal inventory level. After manufacturers start the destocking process, it is believed that the inventory of polyester filaments will return to normal levels.
2. High price
We all know that weaving Manufacturers have a raw material purchasing mentality of “buy up, not down”. However, raw materials have continued to decline recently, and have continued to exceed the bottom price of weaving manufacturers. Therefore, the vast majority of weaving manufacturers basically adopt a buy-and-use approach to raw materials. , a cautious wait-and-see attitude. Polyester yarn has fallen into a vicious cycle of “the more it falls, the less it will be bought, and the less it buys, the more it will fall.” If the production of polyester yarns begins to reduce, the inventory decreases, and the weaving market basically exists, it will inevitably form an effective support for the price of polyester yarns.
Not only is the polyester yarn itself and the downstream weaving market negative, but upstream PTA, ethylene glycol and crude oil have not provided effective cost support for it. Polyester prices have been falling, causing confusion for both polyester and weaving companies. This time, some manufacturers have taken the initiative to reduce production, whether it is to reduce their own business risks or to attract more polyester manufacturers to join the camp and increase the price of polyester filaments, which may open up a new situation for polyester filaments.
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