Looking back at PTA’s market situation in the past month or so, we can see that the market has repeatedly risen and then dropped rapidly. Extreme market fluctuations of 300 points a day are not uncommon in the past month!
Following the sharp plunge in the afternoon of July 22nd at 1909, the main contract of PTA, and after falling to the limit in late trading, the market opened lower again after the opening on the 23rd, and before closing at noon The lower limit was sealed, and the main 1909 contract closed 5.01% lower than the previous day to 5504 points. Later, as market news pointed out that Fuhaichuang PTA equipment may end maintenance ahead of schedule, PTA futures fell again under pressure and continued to fall for several consecutive trading days.
Although the fundamentals of the PTA spot industry chain have not changed significantly, under the pressure of the continued decline in futures, PTA spot The market is also facing a crisis of sharp decline. This also caused the downstream polyester manufacturers to shout: We really can’t hold on!
1. All profits will be lost, which will be a “fatal blow” to polyester manufacturers!
Since this year, the high profit status of PTA manufacturers has been obvious to all; even in the face of successive plummets, PTA cash flow can still maintain a high level. But for polyester manufacturers, it was a fatal blow. There was originally only a small profit margin. As prices continued to weaken, various polyester filament products fell into losses.
The first one to bear the brunt is DTY products. Most texturing manufacturers are deep in losses. In the recent period of falling prices, DTY, which was already on the verge of losing money, has further intensified its losses. It is even worse than the losses in mid-to-early May, setting a new low for the year.
As for the FDY market, the situation has not been ideal in recent days. Also faced with certain losses. Although FDY manufacturers are still in a state of slight losses, it is quite sad that as a former “profit king”, it has fallen from the high profit level of 1,000 yuan.
Among polyester products, in recent times, It was POY that performed the strongest. Amidst the noise of losses, it was able to maintain capital operations and did not repeat the mistakes of the year. Although the concentration of the POY market is relatively high, which will provide certain support for it; if the PTA continues to suppress it, it may intensify the profit shrinkage of the POY market.
2. Prices have dropped to the lowest level in the past two years, but production and sales remain at a low of 30-50%!
Subject to the pressure of this wave of PTA plummeting prices, the polyester market has continued to experience weak declines in recent trading days, with mainstream manufacturers quoting an average daily price of 50-200 yuan/ton. Room for downward adjustment. Judging from the specific data, after this round of decline, polyester filament products that were already running at a low level have become even worse. It is reported that the current price focus of various polyester products has dropped to the lowest level in the past two years.
In recent days, polyester filament has fallen, fallen, and fallen. Among the themes, and prices have fallen to lows; according to common sense, the downstream market will more or less purchase, with more or less urgent purchases or short-term stockpiling. As in the previous stage, the polyester market has experienced high production and sales from time to time. However, I never expected that for the recent low-level raw materials, the downstream weaving market did not pay for it at all. There was a lack of interest in purchasing, and high production and sales did not come as promised. What is even more miserable is that the production and sales of polyester have only maintained a low level for nearly ten trading days. At a low level of 30-50%.
3. The low inventory has dissipated. Inventories are approaching highs for the year!
As low production and sales continue to ferment, the low inventory that polyester manufacturers were once proud of in the early days has gradually dissipated. Especially in the past half month, the inventory of polyester manufacturers has been rising linearly, approaching the previous high of the year, showing pressure. According to the statistics of China Silk City Network, the overall inventory of the polyester market has increased to 14-23 days. In terms of specific products, POY inventory has reached 8-12 days, FDY inventory has reached around 14-20 days, and DTY inventory has reached 14-23 days. to about 21-26 days.
From the perspective of the polyester market, we are almost in a dilemma!
In the early stage, driven by the surge in PTA, the polyester filament market also followed suit to a certain extent. However, it was difficult to expand the pace of the increase, resulting in insufficient follow-up of profits of polyester manufacturers, and even part of the profits were lost. PTA absorption; on the other hand, it also affects the production enthusiasm of the downstream weaving market to a certain extent.
Nowadays, dragged down by the plummeting PTA, the polyester filament market has to follow the decline further. The price drop has caused profit margins to shrink linearly; however, the key is that downstream weaving manufacturers still do not pay the bill. We still choose to purchase low-level raw materials with caution.
With low production and sales, high inventory and continuous expansion of losses, what should polyester manufacturers do?
According to news on the 26th, a large factory plans to overhaul 2.2 million yuan on the 1st in August tons of PTA production line, the maintenance time is about 15 days. Unexpectedly, the overall transaction atmosphere of the polyester filament market in Jiangsu and Zhejiang areas picked up in the afternoon of the 26th, and the average production and sales of the polyester market that day rose sharply to 140-150%. Is the polyester filament market going to avenge its past humiliation and start to “heat up”?
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