Last Friday, affected by the unexpected CPI data in the United States, financial markets experienced violent oscillations and international oil prices plunged.
Affected by this, the price of polyester raw materials fell.
In terms of PX, it closed at around US$1,413 last Friday, a sharp drop of US$86 from the previous day!
In terms of PTA, as of the closing at 15:00 on June 13, the main PTA2209 contract closed -222 yuan/ton to 7340 yuan/ton compared with yesterday’s settlement. Spot prices fell by 208 yuan/ton to 7,510 yuan/ton.
In terms of ethylene glycol, as of the close at 15:00 on June 13, the closing price of the ethylene glycol futures 2209 contract was 5,177 yuan/ton, down 83 yuan/ton from yesterday. Spot prices fell by 125 yuan/ton to 5,275 yuan/ton.
Polyester filament may end its rally
Driven by international oil prices, polyester raw materials have experienced rapid rises and falls in the short term. This “roller coaster” ride is really exciting. A sudden rise must lead to a sudden fall, which seems to be a fixed law, but I didn’t expect it to happen so quickly.
As the source of bulk commodities, crude oil will inevitably have a negative impact on chemical products once it plummets or falls below the limit. After experiencing a ferocious rise in prices, polyester filament yarn may start to weaken this week. On Monday, the prices of most polyester factories were stable and ended the upward channel, but there were also a few manufacturers with room for downward adjustments of 100 yuan/ton.
According to normal logic, it has officially entered the off-season, and even if polyester prices do not fall, they should be more stable. However, on the cost side, high oil prices and PTA have provided strong support for it, causing its price to remain high. However, in the absence of demand support, once the cost surface is loosened, prices will inevitably fall back quickly, making it difficult to maintain sustainability and drive.
Traders may be “cut off leeks”
But the worst situation is for downstream companies. Raw material prices rise and fall, costs fluctuate greatly, and profits also fluctuate. In the first half of the year, under the influence of the epidemic, the price of gray fabrics fell sharply. Let me ask, where is the profit? What’s even more frightening are the speculators, who have been cut quite painfully in this wave of leeks.
Last week, driven by the continued rise in polyester filament yarns, the transaction atmosphere in the downstream gray fabric market also improved, and manufacturers shipped larger quantities of goods. But how many of the gray fabrics sold are actually used for substantive order production? The answer can be said to be very few, which can be seen from the market conditions of the printing and dyeing market. According to data monitoring from Silkdu.com, the current operating rate of printing and dyeing factories in Shengze is only 58%. The operating capacity of large factories is mostly around 70%, while the load of small and medium-sized dyeing factories is low, maintaining around 50-60%. The inconsistency between the sales market of gray cloth and the market of printing and dyeing production shows that the circulation of gray cloth is still in the gray cloth market, which is the operation of some “traitors”.
Crude oil has plummeted, PX, PTA, and ethylene glycol have both fallen. Polyester prices have weakened. The gray fabric prices that have just been fine-tuned may be in jeopardy and face the risk of falling again. Once the price of gray cloth falls, the gray cloth in the hands of traders will become a “hot potato” and everyone will want to sell it. But without losing money, who would be willing to take over? If a trader has a strong enough capital chain, it is not a bad idea to store it in the warehouse for a longer time. After all, oil prices are still “high”, and some institutions predict that the international oil price will reach US$150 per barrel. But no matter how many companies have such strong strength, I am afraid that there will still be many companies that will suffer losses.
To make matters worse, the transaction atmosphere in the gray cloth market has begun to cool down as polyester raw materials have become “green”, and the delivery speed of gray cloth has slowed down. At this point in time when the price trend of raw materials is uncertain, downstream companies will only be more cautious when purchasing goods. Although the 618 e-commerce season is approaching, it does not seem to have much impact on the market. Substantial orders are limited, mainly for winter down jacket fabric samples and sales samples. There are not many orders placed in large quantities, and autumn and winter orders have not yet been fully opened. . In terms of foreign trade, the market demand for clothing is improving, coupled with the depreciation of the RMB and the decline in the exchange rate, which has stimulated exports to a certain extent.
The polyester-weaving market has become an intermediate “barrier lake” for passing inventory. After the market entered the off-season, weaving companies have reduced their operating rates and reduced demand for raw materials. Some of the inventory removed by polyester factories did not flow into weaving companies and was instead hoarded in the hands of traders. These factors will become potential risks for polyester and weaving production reduction and discontinuation in the future.
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