In just a few days, the mainstream production and sales of polyester exceeded 100 for two consecutive trading days! Looking at the whole of October, apart from that, there is only a short “one-day trip” on the 11th!
This kind of over-100 production and sales is simply normal for the polyester filament market in the past two years; but judging from this year’s market, it is It’s an “exciting” moment! And it is not difficult to find that in the remaining trading days this week, the mainstream production and sales of polyester are mostly around 80-90%. Is polyester filament “stimulated”?
1. Autumn and winter fabrics are on the sales “stage”, and the inventory of gray fabrics has dropped to 37 days
In mid-to-late October, the textile market has undergone significant changes. The entire fabric market has shown signs of recovery, product shipments have increased, and the weaving market has shown an overall upward trend. As the temperature drops, autumn and winter fabrics are on the sales stage in the market, sales are gradually heating up, transactions are amplifying, and the demand for fabrics from brand owners and clothing factories has improved. In addition, some spring and summer fabric orders are also being placed in an orderly manner, and manufacturers’ shipments are better than the previous period. The market has finally caught the pace of the “Silver Ten”.
As the fabric market is driven by goods, the high backlog of gray fabric inventory accumulated by weaving manufacturers in the early stage has finally been alleviated. According to data from sample companies on China Silk City Network, the current inventory of gray fabrics in Shengze has dropped to about 37-38 days, which is significantly lower than the previous high inventory of about 43 days. The inventory pressure has dropped significantly. Although the inventory pressure of weaving manufacturers is still relatively high compared with the previous two years, judging from this year’s data, this is already the lowest inventory level in the past five months. To a certain extent, this is also beneficial to the polyester filament market.
2. The weaving market is running at a high level after startup, and raw materials are only available for 7 days
Although the market has different opinions on this year’s “Golden Nine and Silver Ten” market, domestic demand and foreign trade markets have improved to varying degrees in the recent stage, and manufacturers have many orders on hand to execute. Boosted by this, the operating rates of several major industrial clusters in Jiangsu and Zhejiang have been operating at a high level recently, and manufacturers’ production enthusiasm is quite stable; according to statistics, the current operating rates of water-jet and air-jet looms in Shengze area are concentrated at about 80-90%. The opening rate of the warp knitting market has also risen to around 80% to 90%. With the high operating rates of various markets, it also means that there must be a rigid need for raw material procurement, which to a certain extent supports the demand momentum of the polyester filament market.
From the previous stage, downstream weaving manufacturers were concerned about fluctuations in raw material prices or their own funds and inventories. Due to various considerations, the speculative operation of stockpiling raw materials has been significantly reduced, and the enthusiasm for purchasing has also weakened. According to research, the current stocking of raw materials by weaving manufacturers in Shengze market only lasts about 7-10 days. Normally in previous years, the raw material inventory of weaving manufacturers will generally remain around 15-20 days. Some manufacturers with large stockpiles have 25 days. -30 days or above. This also means that the raw material stocks of weaving manufacturers are generally low nowadays. In this low raw material environment, it will more or less trigger the procurement demand in some markets.
3. The tax system has been upgraded and optimized, and month-end purchases have been brought forward
Generally speaking, towards the end of the month, downstream weaving manufacturers will have a wave of raw material purchases, perhaps due to For invoicing needs, it may also be a purchasing node. Looking at this month, in order to further optimize tax services and improve the quality and efficiency of the VAT invoice management system in serving taxpayers, in accordance with the unified deployment of the State Administration of Taxation, the Jiangsu Provincial Taxation Bureau of the State Administration of Taxation will launch VAT on November 4, 2019 Invoice management system version 2.0 (hereinafter referred to as “system version 2.0”). It is understood that from 17:00 pm on October 25, 2019 to 8:30 am on November 4, 2019, the “Jiangsu Province Value-Added Tax Invoice Selection Confirmation Platform” suspended its services, which is bound to have a greater or lesser impact on the textile market. Due to the impact, some weaving manufacturers have advanced their raw material procurement at the end of the month.
Four. Upstream raw materials rebounded at the bottom, bringing certain cost support
Previous stage The polyester filament market is sluggish. In addition to insufficient support from downstream demand, there is also pressure from upstream raw material costs. Finally, the upstream raw material PTA and ethylene glycol markets have bottomed out in recent days, bringing certain cost support to the polyester filament market. Benefiting from the rise in crude oil prices, continued maintenance of PTA equipment and progress in Sino-US economic and trade negotiations, PTA prices will rebound to a certain extent in the short term.At this time, the current negotiated price of PTA in the internal market is mostly around 4920-4980 yuan/ton. The same is true for the ethylene glycol market. Futures, electronic trading and spot prices have all rebounded slightly. The current spot price is concentrated at around 4620-4680 yuan/ton.
Although it is still unknown whether the polyester filament market can continue to heat up in the future! Some “voices” in the market have said that whether it is the upstream raw materials PTA, ethylene glycol, polyester filament or the weaving market, bullishness is a short-term behavior; the mid- to long-term market decline is still more likely. In any case, the weaving market has heated up in recent days, which has more or less given the market a “calming agent”.
