After returning from the May Day holiday, crude oil and polyester yarn, which had been in a downward trend, began to pick up, starting a wave of price increases.
So, what causes polyester What is the rise in silk stock this time?
Polyester filament rose in response to the release of good news
The rise in polyester filament was actually driven by the rise in crude oil futures. International crude oil futures The U.S. oil June contract has rebounded strongly, with the June contract rising for 6 consecutive days, rising from around US$12/barrel to US$25/barrel. After the liquidity crisis in the crude oil market has been lifted recently, the production reduction agreement of major oil-producing countries has taken effect, providing a strong boost to oil prices. support, and began to rebound strongly from low levels.
Crude oil, as the source raw material of the polyester market, has a cost-promoting effect on polyester products. Before May Day, it was affected by Affected by the boom in protective clothing fabrics, all specifications of polyester yarns have been raised by about 50 yuan/ton. The replenishment atmosphere of downstream textile mills has picked up.
Coupled with the announcement by many overseas countries that they will begin to relax blockade measures to control the epidemic, on May 4, many governments, including Italy, Finland and several states in the United States, took actions to relax blockade measures in order to restart the economy. As well as the sudden accident at the Ningbo PTA plant, involving a production capacity of about 700,000 tons. Stimulated by this series of good news, the market regained some confidence, and polyester yarn opened an upward channel.
Moreover, the current price of polyester yarn is at a low level. If polyester yarn can be seen to continue to rise, the atmosphere for downstream stocking will also continue to heat up. Seeing this rare continuous rise, chemical fiber factories naturally hope to stimulate downstream demand through price increases. Stock up.
How long can the rise in polyester yarn last?
The lack of terminal orders has become the biggest resistance to the rise of polyester yarn
The textile market is still determined by the order receiving situation of the downstream. The lack of terminal orders has affected the purchasing intensity. If it cannot keep up, the current rise in polyester yarn may be just a flash in the pan.
Although Europe’s new sales have rebounded but then fell again, the epidemic situation in the United States has not improved significantly. Many traders also said that Europe and the United States have not resumed orders, and there is no notice of proofing. It can be seen that it will take some time for the demand for clothing in Europe and the United States to recover.
Since the end of April, some anti-epidemic supplies, such as polyester taffeta, pongee, Oxford cloth, etc., which can be used to make protective clothing and body bags, have become popular, and large orders of hundreds of thousands of meters are often placed. , the manufacturer that received the order just needs to restock. However, this is only limited to the fact that manufacturers producing these gray fabrics can receive orders, and the market improvement is not obvious. Most manufacturers will continue to face a lack of orders and rising inventories of gray fabrics for a long time to come.
From the monitoring situation of China Silk City Network, the current gray fabric inventory of weaving manufacturers in Jiangsu and Zhejiang has risen to 43 days, which is about 6 days higher than the inventory of about 37 days in the same period last year. After rising for about 20 days, the inventory of gray fabrics has now reached the highest level in the past three years! It’s scary high.
Gray cloth is money. If it cannot be sold, the money is sitting in the warehouse, but the looms are still producing continuously. This Weaving manufacturers are really under a lot of pressure. They have less and less liquidity on hand, and naturally there is not enough cash to stock up on raw materials. This is also the biggest resistance to the rise of polyester yarn.
Demand is not reliable, and price increases are in vain
In fact, for cloth owners, what they most want to see is that raw materials will rise, and cloth prices will rise. Follow the rise, this is the real profit.
Judging from the current situation, the increase in cloth prices has a lag, and it is very difficult to follow the increase. Or is it because the cloth cannot be sold due to a lack of orders, so why should it increase? A cloth boss with more than 100 looms said: “Unless raw materials increase a lot, it will be difficult for fabrics to keep up. Moreover, there is too much production capacity for gray fabrics. Many manufacturers’ inventories are about to burst, and demand is decreasing. Buy now.” It is a high-end raw material, and we are still producing low-priced fabrics. Our profits have not improved. The price of the four-sided fabric we make has dropped by 7%-8% since we resumed work after the year. Moreover, customers frequently lower prices, and our raw materials have increased slightly. We don’t dare to raise the price of cloth at all.”
Under the pressure of high inventory and low demand, the pressure on gray cloth to rise is very strong. Many cloth bosses said that even if the raw materials increased by 500, gray cloth would not dare to increase. Part of the extra cost has to be borne by the manufacturers themselves. In addition, the current epidemic situation has not yet been completely controlled, and the local market enthusiasm cannot lead to an improvement in the entire market. Most manufacturers adopt a buy-and-use strategy and are more cautious in purchasing.
The future prospects are unclear, and weaving companies need to be cautious when stocking up.
In the short term, with the support of crude oil, the upward trend of polyester yarn is already obvious. , some companies with sufficient financial strength may want to stock up on raw materials. Of course, if you have abundant funds, you can take the opportunity to stock up on some, and treat it as an investment.��For those companies with insufficient financial strength, the editor believes that holding on to the capital pool is the most important now, and the future prospects of crude oil and polyester yarn are not clear, and there is a high risk of decline. If the terminal demand does not improve significantly, The editor believes that it is not advisable to be too radical. Boss Bu should think twice before making a decision! </p
