Last week, under the influence of the loosening of raw material costs, downstream procurement showed a cautious attitude, and the overall production and sales of the polyester market fell back to the 70-90% level. As downstream resistance to high-priced raw materials increases, chemical fiber manufacturers also tend to be cautious in their quotations. So, does this mean that the market’s skyrocketing rise of two to three hundred dollars a day has come to an end?
Unfortunately, the answer is no. Moreover, people in the industry are already familiar with the routine of chemical fiber manufacturers “holding meetings as soon as production and sales drop.” Of course, this time is no exception. Last Friday, according to industry insiders, nearly 25 polyester factories gathered in Shengze to hold a market seminar. The meeting focused on the reduction and suspension of polyester filament production around the Spring Festival in 2017.
It is reported that all polyester factories attending the meeting stated that they would have load reduction and parking plans. As soon as the news came out, downstream nerves immediately tightened: Now that the inventory is so low, the supply of futures will definitely be tighter in the future. Will prices rise? Do you want to hurry up and stock up now?
In fact, the editor personally believes that although this meeting did not directly implement the price increase spirit of the meeting as in the past, the content is actually “a change of soup without changing the medicine.” Now polyester manufacturers are just taking advantage of the Spring Festival to reduce production, and their ultimate goal is to increase prices! Why do you say that? Mainly based on the following reasons:
1. First of all, it must be clear that the chemical fiber manufacturers’ “releasing news” about production reduction and suspension of production is more to influence the market from the news aspect. It also seizes the fact that the weaving manufacturers are now “fearful of price increases. If there is any disturbance, The mentality of “buy early and save early”. You know, reducing production and suspension during the Spring Festival is a routine matter, and it seems that it was not discussed in the form of meetings in the past. The meaning of informing the downstream with such “big fanfare” is very obvious.
2. At present, chemical fiber manufacturers have higher profits, so it is unlikely that they will stop production early without making money. According to monitoring data from China Silk City Network, the profit margins of mainstream polyester filament products have increased significantly since this year. Recently, the profits of FDY and DTY have reached their peak during the year, approaching the thousand yuan mark. This also proves that even if chemical fiber manufacturers are expected to reduce production and stop operations, their efforts will not be too great.
3. Due to the special market situation this year, some polyester factories in Jiangsu and Zhejiang have been shut down for a period of time during the G20 period. Therefore, the willingness of factories to reduce production again during the Spring Festival is obviously lower than in previous years. However, considering that downstream demand will shrink sooner or later, holding a meeting at this time is equivalent to inoculating each other among polyester factories. It does not affect the market from the actual supply and demand side, but in order to pave the way for later price increases, this operation of reducing production and suspension is still necessary. Meaningful.
4. From the perspective of inventory, chemical fiber manufacturers do not have any demand for “limited production suspension and price guarantee” in the short term. It is reported that the inventories of various chemical fiber manufacturers are still at low levels, and some have even been sold short. According to statistics, even if only 70% of the output is produced and sold every day from now on, it will take close to 20 days to reach the usual normal inventory. Therefore, in the short term, chemical fiber factories may make technical adjustments to stabilize overall prices, but high-end product suppliers still have the possibility of price increases!
Based on the above analysis, chemical fiber manufacturers are still optimistic about the market outlook, supported by various favorable factors. It is expected that the implementation of production reduction and suspension during the Spring Festival will not be too strong, and there are also great variables in time.
In the short term, polyester filament is not expected to fall in price, and high-end product suppliers will still take advantage of low inventory and tentatively raise prices for particularly tight specifications to stimulate downstream purchasing desires!
If you don’t believe me, take a look at the reaction of the polyester filament market today after the meeting:
Most specifications of Hengli DTY series increased by 200 yuan, and some increased by 100 yuan. The prices of FDY and super bright FDY remained unchanged, and there were no preferential policies; Shenghong FDY semi-glossy and glossy prices generally increased by 100/300 yuan/ton; Wujiang Yingxiang FDY remained stable, Some specifications of DTY increased by 200 yuan; some glossy FDY in Wuchang increased by 50 yuan/ton; Rongsheng semi-glossy FDY all increased by 100 yuan/ton, of which 20D-22D all increased by 200 yuan/ton, and DTY increased by 100 yuan/ton; Kaishi Group yesterday POY rose by 150 yuan, but the price remains unchanged today; Lianda black silk POY generally rose by 50 yuan/ton; Southeast New Materials FDY filament rose by 50 yuan/ton…
Although it is no longer the crazy market situation in the early stage, as long as the expectations of polyester filament price increases remain unchanged, for downstream weaving companies, the difference is still only a big increase or a small increase… So when will the hard days end…
</p
