March has entered the second half of the year, but there is still no sign of the peak season in the market, and the stumbling block of the epidemic has not been removed. The “Golden Three” seems to have no hope. Due to this situation, the textile people in the market are not optimistic about the “Silver Four” “In the peak season, the market is stable, but the polyester yarn in March is really ups and downs!
In the first half of the month, polyester yarns rose along with crude oil for a period of time. However, as the cost side was lost and there was no demand support, polyester yarns immediately began to decline. However, the downstream sentiment was high and they just refused to buy it. The contradiction between market supply and demand became increasingly prominent! But the editor predicts that the downhill road for polyester may not be long! There are three reasons:
PTA production cuts, cost support will appear
On the one hand, the PTA industry giant plans to close the factory with an annual output of 400,000 tons. The load of the PTA factory is now hovering around 67%. Compared with the same time in previous years, the load has dropped by a full 10%! Now that PTA’s cash flow is in an almost unsalvageable state, PTA factories are determined to reduce production and boost prices!
However, PTA is in a position close to crude oil in the textile industry chain, which means that it is the first product to be affected by the fluctuations of crude oil. The slightest fluctuation of crude oil will affect its trend, and although crude oil has fluctuated greatly recently, , but it is still at a high level, so it is expected that the price of PTA will increase after the production reduction. If the price of PTA rises, cost-side support will appear!
Orders are delayed, but the off-season is not slow?
On the other hand, the peak season is not busy in March, and the orders are all small-volume orders, so where have all those large orders gone? It can’t disappear out of thin air. “Wasn’t the market bad last year? The clothing factory has a lot of inventory. Now they are digesting last year’s inventory. There shouldn’t be too many orders in a short time.” A person who specializes in T400 The boss and the editor said.
From this point of view, it’s not that the order is gone, but that it hasn’t arrived yet! According to market rules, these orders will always explode at a certain point in time. If the cost is still high by then, the increase in polyester prices will be unstoppable. This is why a slow peak season is often followed by a slow off-season.
Polyester production reduction is a general trend
Third, due to unsatisfactory downstream conditions and inconvenient transportation, polyester factories have accumulated a large amount of inventory. According to statistics from Silkdu.com, the overall inventory of the polyester market is now concentrated in 21-25 days; in terms of specific products, among them POY inventory is around 21-27 days, FDY inventory is around 18-21 days, and DTY inventory is around 22-25 days. The production reduction of polyester yarn itself is a general trend and has been steadily advancing.
On March 15, a polyester factory in Shaoxing shut down its 200,000-ton filament yarn unit for maintenance;
The 300,000-ton filament unit of a polyester factory in Zhejiang will undergo maintenance at the end of March.
A 180,000-ton filament plant in Xiaoshan will undergo maintenance at the end of March
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The current market situation is that the more frequently polyester factories promote sales, the higher the downstream sentiment will be. However, polyester factories are now in a state of profit margin promotion. Just look at 150D conventional polyester yarn. According to the raw material price on March 21 Accounting: FDY 150D profit: -128 yuan; POY 150D profit: -28 yuan; DTY 150D profit: 450 yuan. As costs rise, polyester yarn’s own promotional profit margins are squeezed out, and polyester factories will inevitably raise polyester yarn prices to protect their own interests.
In short, the current market environment is not very optimistic. Everyone is playing a game of supply and demand, but there are still eggs under the nest, and they are all grasshoppers in the industry chain! So when the polyester factory is on sale, maybe it’s a good choice to buy at bargain prices and save money?
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