March was originally the traditional peak season for the weaving market, but recently both the upstream and downstream sectors seem to be going downhill. The trend of raw material polyester filament falling from high levels is becoming more and more obvious. The downstream sentiment of buying up rather than buying down is also very negative for replenishment.
The market suddenly turned cold, and the impact on enterprises cannot be underestimated. So, while everyone is not adapting, they are also beginning to think rationally: Is this market situation just a short-term correction or is it really a slowdown in the peak season? How much room will there be for polyester filament prices to fall in the future?
In fact, what the author wants to say is that the “polyester craze” that started in the second half of last year has lasted long enough. The market rises and falls. The price of raw materials is not China’s housing prices. It does not matter whether it falls or rises.
Of course, this is just a mild joke. What I want to express is that this round of downward trend in raw material prices is not surprising, because the current thoughts of upstream and downstream are obvious:
Chemical fiber manufacturer: If I have money, I will be willful and not afraid of falling!
After the Spring Festival, the upstream polyester raw materials changed direction and fell sharply, especially ethylene glycol, which suffered a cliff-like decline. The spot price plummeted, falling from over 8,000 yuan to the current level of around 6,800 yuan/ton. Within the month The decline reached 15%. At the same time, PTA futures experienced several sharp declines, which also led to the decline of spot prices, which directly led to the collapse of polyester filament costs and a weak price decline.
However, a closer look shows that the slightly firm polyester yarn prices and the unstoppable decline of raw materials have still created considerable profit margins for chemical fiber manufacturers. According to the data monitoring of China Silk City Network, the current profit of DTY has exceeded 1,000 yuan, and the profit of POY and FDY products is also as high as 700-800 yuan. The production efficiency is very impressive.
In the past, when the market trended down, the usual tactic used by chemical fiber manufacturers was to hold a meeting to stabilize the situation. The main theme of the meeting is of course to protect prices and profits. However, recently such “union meetings” have lost their voice. It can also be seen from these small changes that chemical fiber manufacturers are not worried about money now! But inventory! in stock!
According to the common practice in the polyester filament industry, if the inventory days are greater than 15 days, it means that the company’s inventory level is too high, and operating pressure and risks will increase. According to data monitoring from China Silk City Network, the current overall polyester market inventory has risen to around 17-23 days. To put it more intuitively, if the average daily sales volume of a polyester factory is 1,000 tons and the average selling price per ton is 9,000 yuan, then when the inventory days reaches 15, a polyester factory will need to occupy 1000 × 15 × 7000 = 135 million yuan. of working capital.
It is conceivable that high inventory takes up a lot of resources of the company, resulting in a decrease in capital liquidity. Moreover, the current operating rate of most manufacturers is at a high level, but production and sales have not yet improved. More is being produced, but less is being sold. If we don’t cut prices at this time and promote promotions, we may really have nothing to eat. Therefore, judging from the current mentality of chemical fiber manufacturers, unless production and sales improve and the inventory falls, there will definitely be some price cuts in the future!
Weaving manufacturers: Raw material prices are still artificially high, hope they fall!
Although raw materials have shown signs of cooling recently, for weaving manufacturers, the current decline is still not painful. After all, since the second half of last year, the price of some raw materials has increased by more than 30%, and their psychological price is still around the level of October last year. For example, the current price of FDY75D/72F is still around 10,000 yuan, and according to some weaving manufacturers According to the response, they think the reasonable price is around 9,000 yuan. Therefore, they are not tempted by the current pullback market and are not in a hurry to restock.
After all, the cost of raw materials accounts for a large proportion in the production and operation of enterprises. After being abused by the previous market conditions, weaving manufacturers are now very cautious in their operations. It is no longer just a bullish or bearish trend, or simply a sustained trend. The mentality of buying up rather than down will pay more attention to the rationality of the price, that is, whether the current price is consistent with its value.
Since the profits of polyester filament are still at a high level, and the orders received by weaving manufacturers since the beginning of the year have not been as expected, the slight correction in raw material prices has made it difficult to negotiate some orders. Therefore, I watch the upstream “eating meat”, and I But they can only “eat porridge”. The mentality of the weaving manufacturers is naturally, let it fall a little further, otherwise I will not buy it!
How much room does polyester filament have to fall in price in the future?
Now, the mentality of the upstream and downstream has become obvious. One is looking forward to falling, and the other is not afraid of falling. So the question that everyone is concerned about later is naturally, how much room for price decline will there be for polyester filament?
It is difficult for the editor to give a specific value. After all, this issue also needs to take into account upstream and downstream variables. In fact, if crude oil does not have a big impact, first of all, we can be sure that the early market was too high-profile, and now it will gradually enter a stage of volatility, and the upper and lower fluctuation ranges will revolve around a balance point between price and profit. This is the market. rational state.
Therefore, whether it falls by 500 or 1,000, the market will make its own judgment. There is always a price that the weaving manufacturer has in mind. When it reaches this value, the downstream is willing to buy it. When the upstream inventory comes down, the price will automatically increase.It’s stable, that’s all.
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