Towards the end of the year, polyester filament unexpectedly started a wave of crazy gains. Since December, as Europe and the United States have successively approved vaccines and begun large-scale vaccinations, the market has been dominated by optimism. At the same time, U.S. crude oil inventories have declined, and the Federal Reserve continues to loosen monetary policy. All boosted oil prices higher.
Under the influence of the rise in crude oil and the number of PTA futures warehouse receipts and effective forecasts hitting a new high this year, PTA spot futures are still running strongly despite the continued accumulation of warehouses, which has a negative impact on the cost end of polyester filament. Strong support, and at the same time, polyester filament has continued to expand losses for many days, so polyester factories are extremely enthusiastic about following the increase.
In more than two weeks from early December to December 18, the prices of polyester filament POY, FDY and DTY rose to 5,800 yuan/ton, 5,900 yuan/ton and 7,500 yuan/ton respectively. tons, with increases of 12.6%, 11.3% and 10.3% respectively, exceeding the same period in early October.
Crude oil rose, and polyester raw materials PTA and ethylene glycol broke away from the fundamentals. The strength of futures bulls was the biggest reason for the sharp increase in the price of polyester filament. The core driving force, in addition to the continuous digestion of inventory by polyester factories to low levels in the process, also provided support for the continuity of price increases. Polyester filament entered a loss-cost increase-stop loss and price increase-production and sales volume-going. There is a cycle of inventory – tight supply of specifications – reduction of discounts.
In previous years, the demand for polyester filament will enter the off-season after December. With this price increase, the production and sales of polyester filament have recovered significantly. From the beginning of December to the present, the demand for polyester filament has The average silk production and sales were 80%, an increase of 10 percentage points from the same period last month.
According to survey data, more than 50% of downstream factories have stocking inventories of 20-25 days, 30% of downstream factories have stockings of about 1 month, and a few less than 10% of downstream factories have stockings of about 1 month. Factories will stock up until 1-2 weeks after the Spring Festival, and downstream purchasing power is still strong.
At the same time, while the cost-end benefits continue to be released, the maintenance of polyester equipment is also gradually increasing. According to statistics, in mid-December, polyester factories reduced production or increased maintenance equipment, mainly because of power cuts in some areas and the need for equipment modifications in some polyester factories.
In December 2020, news about energy conservation, emission reduction, and power restriction policies appeared in many places, including Zhejiang, such as “Tongxiang launched dual controls on energy and coal consumption in the city. “A-level emergency response to reduce energy consumption”, “Hangzhou advocates energy conservation. If the temperature exceeds 3 degrees Celsius outside the city, agencies will not allow air conditioners to be turned on”, “Power outages have begun in factories in counties and cities in Jinhua, Zhejiang Province, and energy conservation and emission reduction have begun”, “Zhejiang Cixi chemical fiber companies will have power cuts for 2 days before the end of this month… According to verification, because texturing machines consume a lot of power, texturing plants are greatly affected by the policy. Texturing companies in the area have mostly shut down some texturing machines. Recently, due to the high profit level of texturing, the operating load of texturing machines is mostly above 95%. However, affected by this policy, the startup load of local texturing machines is expected to drop to around 80%.
It is expected that by the end of the month, polyester production reduction and maintenance capacity will be around 1.68 million tons, affecting the polyester operating rate around 2.5% . It is expected that by the end of January, polyester production reduction and maintenance capacity will reach around 3.05 million tons, and the polyester operating rate may drop to 83-84% by then.
Because the mainstream polyester factories have not yet made clear whether to carry out subsequent device production reduction and maintenance plans, the follow-up polyester factory devices There is still a relatively large room for change in the scale of maintenance, which will also affect the change of market mentality.
The crude oil market price is expected to continue to rise in the future, and the overall performance of the domestic macro market is relatively warm. In addition, long funds for raw material PTA futures are still strong, and the follow-up may still be strong and volatile, with the cost side driving the role. Expectations are strong.
At the same time, in the first half of December, the polyester factory was in a destocking cycle, and subsequent equipment production reductions and maintenance plans were implemented. From December to the first half of January, the polyester market Overall supply pressure has eased. After the polyester market price continued to rise in December, cost pressure poured into the downstream.
Although the end market is expected to be positive in 2021, downstream demand is currently in a weakening stage. Whether cost pressure can continue to be transmitted smoothly downward will affect the subsequent gathering. Ester market trends. </p
