Cheated again! Last Friday (April 14), the polyester factory determined that the weaving enterprise had reached another purchasing node, and released news that it would raise prices. Using the mentality of “buying up, not buying down”, production and sales directly exceeded the 200 mark. The day after the news of the price increase (April 15), the price of polyester yarn increased as promised, with an increase of 50-100 yuan/ton.
But the good times did not last long. On April 17, some manufacturers lowered the price of polyester yarn. This time, for weaving companies, it was really a bargain hunting on the mountainside. The polyester market prices are now rising and falling. To understand why polyester prices are fluctuating, we need to look at its underlying logic. The underlying logic of current polyester price fluctuations is to follow costs. The reason for the price increase news on Friday was that PTA stopped falling and rebounded, driving polyester factories to follow suit.
Crude oil hits biggest drop in April
However, oil prices fell sharply in late trading today, the largest one-day drop in April. WTI’s main crude oil futures closed down $1.69, or 2.05%, at $80.83/barrel; Brent’s main crude oil futures closed down $1.55, or 1.8%. It was quoted at US$84.76/barrel. The crude oil market news was relatively calm for most of the weekend to Monday, which allowed oil prices to continue their strong sideways performance during the Asian session. Although there were some shocks and corrections, overall oil prices were resistant to falling under the support of production cuts. This situation continued until the night session. Changes began to occur, and oil prices began to intensify their correction.
PTA lacks motivation to rise
At the same time, the PX end, which has been relatively strong this year, has also been affected. However, for the PTA end, the support for cost-end crude oil and PX is still there, but the support strength has declined slightly compared with the previous period. The demand for superimposed terminals and downstream markets is less than expected, and PTA continues to rise. Momentum is slightly lacking. Considering that the recent pressure on the financial side of Europe and the United States has not been eliminated, and the cost side support is still there, although the PTA has slightly corrected, the magnitude is relatively limited.
Polyester prices are easy to fall but difficult to rise
As mentioned above, the price of polyester filament currently fluctuates according to the cost. From the picture below, we can find that the three lines above represent the prices of three specifications of polyester filament, and the gray line below represents PTA. Basically It can be said that PTA thread and polyester yarn are perfectly mixed. It is not an exaggeration to say that the price of polyester yarn is cheaper. The entire price trend is completely consistent. Therefore, when the momentum for PTA to rise this time is insufficient, the momentum for polyester yarn prices to rise is also Still not enough.
The textile market is in recession
From the perspective of the textile market, demand has declined instead of rising since entering April. Many companies have stated that they have not even received a new order since entering April. They are currently completing orders received in March and the orders can last for a long time. Basically until the end of April, orders are in short supply, raw material costs are still high, and the operating rate in Jiangsu and Zhejiang has dropped slightly. As of April 14th, the operating rate is now around 72.8%, down 1.4% from last week. The decline also means a decline in demand. Although the daily production and sales have increased under the influence of buying, it has been two weeks since the last concentrated replenishment of positions. In the later period, demand has not substantially improved. After experiencing the increase in production and sales, the market Or return to a situation of deserted trading.
In the case of insufficient demand, no matter how polyester prices change, weaving companies will only purchase according to their own purchasing nodes. It can be found that all the buying strategies or promotion strategies seen also cater to the purchasing nodes of weaving companies. Therefore, With the cost side relatively weak, polyester yarn has limited upside potential in the short term, and the shock is expected to be weak.
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