Never imagined! The last wave of stocking up in the polyester market before the Spring Festival swept across unpreparedly! On the 16th, after nearly half a month of sluggish production and sales, the polyester filament market set off a purchasing “boom”; mainstream manufacturers’ production and sales surged, and the market’s average production and sales are expected to climb strongly to around 220%. Particularly outstanding is the POY market, where some manufacturers’ production and sales have exploded, with production and sales reaching levels of 400%, 500% or even 700%.
Under this encouragement, the polyester filament price center that had been loose in the past few days stabilized again, and some POY manufacturers even showed room for recovery of about 50-100 yuan/ton in their quotations.
It is also reported that on the 16th, the POY 4+2 Alliance meeting will be held again.
Instantly, it felt like a “counterattack” trend was blowing in the market, and the benefits from all sides were stimulating the enthusiasm of downstream weaving manufacturers to stock up! What exactly caused the “thousand-layer wave” in the downstream market? Allow me to explain them one by one.
1. Maintenance of polyester equipment gradually begins
This year, the polyester market equipment maintenance plan has not been warmed up in advance as in previous years. It has “gathered” into the maintenance season, and the overall operating rate has declined at a low rate. Under the temptation of high profits, polyester filament manufacturers have also increased their maintenance efforts. Much lower than last year. Although according to preliminary market statistics, the maintenance scale of polyester manufacturers during the Spring Festival this year has shrunk from about 10 million tons last year to around 5 million tons; however, due to the impact of low inventory of manufacturers, such as Shenghong Chemical Fiber, Tongkun Group, Xinxin The gradual launch of production reduction and suspension plans by Fengming, Shenjiu Chemical Fiber, Baihong and other manufacturers has still stimulated the purchasing intentions of downstream weaving manufacturers to a certain extent.
2. Polyester raw materials continue to operate at a high level
As important upstream raw materials for polyester filament, PTA and ethylene glycol continued to operate at a high level in January and did not weaken following the Spring Festival. With the help of tight supply and demand fundamentals and financial support, the ethylene glycol market continues to consolidate at a high level; the internal price hovers around 8,000 yuan/ton, while the external price is concentrated around US$937/ton, especially in recent years. Come at a higher price. In addition, in terms of PTA, although there is a large price gap with ethylene glycol, the recent PTA market performance is still good; the mainstream price in the internal market fluctuates around 5250-5350 yuan/ton. Under such high-cost positioning, polyester filament manufacturers have also strengthened their intention to raise prices.
3. Polyester mainstream low inventory “full of confidence”
Since the fourth quarter of 2016, low inventory has almost become “synonymous” with polyester filament; whether polyester filament is increasing prices willfully or with confidence, it has to be mentioned as low inventory, low inventory or low inventory. According to industry inventory data statistics, at the end of 2016, the overall polyester market inventory dropped significantly to around 3-6 days, a year-on-year decrease of nearly 10 days; among which, POY inventory dropped to around 3-5 days, and FDY inventory was adjusted to 4 -7 days, while DTY inventory has been reduced to 9-19 days. Some manufacturers’ best-selling specifications have zero inventory or even queues for goods. Since January, although the tight inventory situation in the polyester filament market has eased, mainstream inventories are still at low levels in recent years; especially the inventory levels of POY manufacturers.
Whether it is the launch of the maintenance plan for polyester equipment, the confidence of polyester filament manufacturers in high profits and low inventory, or the stimulation of polyester industry conferences, downstream weaving manufacturers are enthusiastic about stocking up. The reason is that, first of all, the polyester filament market has been gradually loosening since January, which has caused downstream weaving manufacturers who originally intended to stock up before the holiday to have a mentality of buying up and not down. Secondly, as the end of the year approaches, downstream weaving manufacturers are faced with the problem of payment recovery. It is difficult to purchase and stock raw materials if they do not have enough money. As the Spring Festival approaches, weaving manufacturers slowly recover their funds, and naturally have money to buy raw materials. . In addition, it is reported that the number of texturing machines on the market will further increase in 2017. On the basis of low POY inventory itself, POY supply may gradually become tight after the Spring Festival, so pre-holiday stocking is extremely necessary.
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