Last week, the Federal Reserve violently raised interest rates again, causing crude oil prices to plummet. WTI crude oil’s support at the US$80/barrel mark failed last Friday, and Brent crude oil also fell below the US$85/barrel mark on Monday. It has completely given up all the gains since the Russia-Ukraine conflict and is similar to the price at the beginning of the year.
The timing of the decline in crude oil is also very subtle. It happens to be in the last week of the Golden Nine. The price of crude oil often affects changes in the polyester industry chain. While the cost side is falling, taking 150D POY as an example, polyester yarn profits have been losing money for 17 consecutive days. Under such circumstances, polyester manufacturers should be very willing to raise prices, but today (September 27) The polyester factory has started its regular month-end promotion, with prices generally reduced by about 300 yuan.
Insufficient cost support
After crude oil fell below the US$80/barrel mark, even though PX prices have remained relatively strong since the second half of this year due to import difficulties, it has driven the stability of downstream PTA and polyester prices. Even when crude oil fluctuates greatly, Polyester prices have also remained dynamically stable.
Now that crude oil has “broken through” again, under such circumstances, the polyester industry chain cannot remain strong and the phenomenon of green all over the screen has reappeared. Today, PTA closed down 3% in morning trading. There is no doubt that a green situation will appear in the peak season. This is something that everyone in the textile industry does not want to see. After all, the current market is relatively sluggish, and the price of gray fabrics is easy to fall but difficult to rise. If the support from the cost side is lost again, the rising channel of gray fabrics will continue to be blocked.
Polyester production and sales are bleak
In addition to the lack of support on the cost side, the polyester factory has just needed stocking after the downstream weaving factories restarted their machines at the end of August. There has been no major movement in production and sales. Production and sales have not exceeded 60% for nearly ten days. At the beginning of the peak season, part of the inventory was cleared and even empty orders were placed on some products of certain specifications. Now the inventory has increased again and has almost returned to the level before the peak season. According to the statistics of Silkdu.com, the overall inventory of the polyester market is now concentrated in 24-28 days; in terms of specific products, POY inventory is around 25-28 days, FDY inventory is around 18-28 days, and DTY inventory is around 24-28 days. Around 23-28 days.
Therefore, when the inventory is high again, polyester factories continue to launch the promotion mode at the end of the month. Since this year, there will be almost no promotion at the end of the month, and this frequency of promotions is almost in line with downstream buyers, with 15 days Or the pace of just-necessary purchases is going on in 30 days. This can be regarded as a tacit understanding between the upstream and downstream in the downturn.
The textile market has not yet recovered
After all, the biggest support lost by polyester yarn is the market demand. Compared with previous years, this year’s “Golden Nine” peak season really did not behave like a peak season. Although the weaving market has increased significantly, in fact, the overall operating rate in Jiangsu and Zhejiang is still It remains below 70% and currently remains at 69.3%. It has obviously reached a bottleneck and it is very difficult to break through without significant changes in the market environment.
This has led to the poor production and sales of polyester yarn mentioned above, the phenomenon of high inventory again, and the overflow of polyester factory production capacity. In order to solve this situation, the polyester factory has deployed downstream, hoping to use the downstream to consume its own raw material inventory. , although this alleviates the urgent needs of the upstream, for weaving enterprises, the involution is more serious. Weaving factories in the upstream layout often have the characteristics of low cost and large production capacity, which intensifies the involution of the industry and makes it more difficult for gray fabric prices to rise.
Generally speaking, since the market situation has not shown the expected peak season since Jinjiu, it has also led to poor production and sales of polyester factories and a large amount of inventory accumulation. Polyester factories want to destock and realize cash, so they will start again at the end of the month. Promotional model, and the discounts are relatively strong. Therefore, it is expected that downstream purchases for immediate needs will be larger, and production and sales are expected to improve.
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