Today (March 8), the commodity market fell across the board and turned into a miserable green. In particular, the chemical sector suffered a collective plunge. Rubber fell 4.41%, while cotton, Shanghai Nickel, PP, glass, PVC, etc. fell more than 3%. Plastics, methanol, PTA, starch, eggs, asphalt, etc. fell more than 2%. Rapeseed oil, palm, sugar, rapeseed meal, soybean oil, Shanghai zinc, coking coal, soybean meal, etc. all fell by more than 1%.
Recently, textile raw materials including PTA and cotton in the bulk commodity market have been on a long journey to find the bottom, and they continue to hit new lows. The market continues to fall more and rise less. At the same time, the downstream spot market of polyester raw materials has also fallen repeatedly. Although it has reached the traditional peak season, the market does not show signs of “gold, three, silver and four”, and from the raw material side, the market has continued to decline. The cold air from above has not been dissipated. From mid-February to the present, the tepid decline in the market has been shocking. Many textile companies have expressed their confusion as to why Yangchun has repeatedly encountered unexpected cold springs in March?
Polyester raw materials have risen sharply and plummeted, and a clear breakthrough direction cannot be determined
After experiencing a sharp rise in PTA in early February, it entered a correction. With the decline in factory processing fees, the market began to turn sharply downward. When the market eased slightly, the sharp decline in crude oil once again led to the collapse of the cost side. As of March 8, PTA was so weak that it was hard to recover. The main futures contract had fallen by 536 points since February 14, a drop of 8.73%. Another polyester raw material, ethylene glycol, was suspended by the listing of ethylene glycol futures, with a decline of more than 30%.
The author believes that the main reason for the current market weakness is the conflict between production and demand for raw materials. After the Spring Festival, there was a significant shutdown of the weaving market and polyester equipment. However, after the PTA equipment underwent extensive maintenance during the G20 last year, the Spring Festival There were not many equipment overhauls. At that time, PTA’s high profits led to a high industry operating rate. In addition, Pengwei Petrochemical, which had been stagnant for a long time, also put materials into trial production in the early stage. The high operating rate and new production capacity led to excess supply and demand of PTA. In addition, PTA warehouse receipts and effective forecasts total nearly 245,000 tons, equivalent to more than 1.22 million tons of spot volume. Therefore, the pressure of PTA oversupply has been reflected in the market after the Spring Festival. Therefore, the contradiction between upstream and downstream production and demand has led to a rapid increase in PTA inventory. After the flight of futures funds at the end of February, the supply and demand pressure on the PTA market was superimposed, and PTA gradually entered a downward channel.
Of course, since Reignwood Petrochemical and Xianglu Petrochemical plants will restart in the second half of the year, 5.9 million tons of production capacity will be put into the PTA market; the existence of PTA production capacity pressure has put a great burden on the market, but it is undeniable that from the upstream PX end Generally speaking, the concentration of PX maintenance in the second quarter is higher than in previous years. From the perspective of annual production demand, supply expectations in the first half of the year are still optimistic.
Polyester factories suffer from “three highs”, and the cooling of raw materials shakes the confidence of the polyester market in rising prices
At present, polyester factories have returned to a high operating level of 85%, and after the rapid decline of PTA and MEG, the profits of polyester factories have been greatly improved. As a result of the substantial increase in profits, polyester factories are operating at full capacity. However, the industrial chain has not been well conducted, resulting in slow sales and inventory accumulation in the polyester market. This is also a factor that has suppressed the market in the near future. In addition, the cooling of polyester raw materials has also shaken market confidence to a certain extent, and the polyester market has obviously begun to decline since mid-February.
The demand side has not released a clear signal of improvement
Compared with the booming weaving market at the end of last year, the overall market has been much weaker since the beginning of spring and is also lower than market expectations. However, according to the author’s market survey, although the orders in the current market are acceptable, they are all in small batches and multiple batches. Moreover, due to the uncertainty about the market price of raw materials, buying as you go has become the current raw material procurement strategy of weaving companies. As for the future market prosperity, most business owners on the weaving side believe that the market will gradually improve during the peak season, but the extent of the improvement remains to be seen, and they are cautiously optimistic. It can be said that the demand side has not released a clear signal of warming, which is also an important factor restricting the current polyester market.
In general, there are still many negative factors for the polyester and polyester end. Three main factors have restricted the market recovery. If the above situation does not improve significantly, then the “gold, three, silver and four” market conditions of this year’s polyester and polyester market will ” “The quality” will not look very good. I have been looking forward to the end of the peak season or just looking forward to the “copper, three, aluminum and four”!
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