In recent years, changes in the situation between the United States and Iran have always been the focus of market attention. On the 22nd, U.S. President Trump announced on Twitter that he had ordered the U.S. Navy to destroy all Iranian speedboats that “harass” U.S. ships.
Crude oil seemed to have “heard” Trump’s call. On the evening of the 23rd, WTI crude oil futures rose by more than 30% during the day. At the close of trading, the WTI crude oil futures June contract closed up US$2.72, or 19.74%, at US$16.50/barrel. It has rebounded by more than 40% in the past two trading days, away from historic lows.
Spurred by the strong rise in the crude oil market, the polyester market is also booming across the board. On the 23rd, the PTA and ethylene glycol futures markets reached their daily limit, driving up the price of raw polyester filament. As of the 24th, the price of polyester filament FDY products was around 5,280 yuan/ton, the price of POY products was around 4,720 yuan/ton, and the price of DTY products was around 6,600 yuan/ton.
Rising crude oil market and polyester raw materials The daily limit is actually a great positive stimulus for polyester filament in the near future, but the price increase of polyester filament is not large. It can be said that most manufacturers still offer stable prices.
At the same time, the production and sales of polyester yarns are basically a “one-day trip” market. On the 23rd, geopolitical tensions stimulated the price of crude oil to rise, driving the production and sales of polyester yarns to meet the demand. Here comes the long-awaited super market. But on the 24th, polyester production and sales dropped again to 50-70%.
Whether it is PTA, ethylene glycol or The current price of polyester filament has almost bottomed out, and there is no more room for decline. Although many companies just need to purchase during the Qingming Festival, they are also gradually consumed. There are not many raw materials left, but weaving companies still do not pay the bill, resulting in production and sales remaining at around 40%.
Weaving companies are facing an “order shortage” and the international shipping industry has suffered heavy losses
The main reason for the sluggish production and sales is that weaving companies have no orders left. Needless to say, foreign trade, the vast majority of foreign trade companies have entered a “vacation” state. The epidemic in important textile exporting countries such as the United States, Italy, Spain, Germany, and France is still spreading, causing foreign trade exports this year to face a critical moment of life and death.
The obstruction of foreign trade has caused every link of the shipping industry to suffer a domino-like heavy blow this year! Recently, the international container shipping industry released the latest data on shipping this year: During the original peak season, the number of sailing suspensions by major shipping companies increased by more than 400%, container throughput will drop by 10%, and carrier profits will drop by US$6 billion year-on-year. Shipping companies The loss will reach 23 billion US dollars!
Domestic trade is also sluggish. After the orders received last year are completed, it will be difficult to receive new orders. The domestic trade market is already homogeneous and the competition is fierce. Now the epidemic has caused insufficient demand and the cake has shrunk. But there are still so many people grabbing it, so naturally there is nothing left.
Inventory hits three-year high, operating rate drops seriously
Insufficient orders naturally lead to the continuous accumulation of gray fabric inventory. According to sample companies monitored by China Silk City Network, the current inventory of gray fabrics in Shengze has risen to around 43-44 days, exceeding the highest inventory level last year.
Rising inventories have made weaving manufacturers start Reluctantly, the operating rate has been reduced. This week, the operating rate of the weaving market has dropped to about 67%, which is lower than the operating rate of the same period last year. It is approaching the May Day holiday week, but the market situation has not improved significantly. Except for 190T pongee, 210T polyester taffeta, pongee conductive fabrics and other fabrics that can be used as protective clothing, the sales of other products have improved. It’s hard to get out by one meter. Therefore, many weaving companies have plans to take a long holiday on May Day and continue to reduce production. The operating rate of weaving enterprises continues to decline, and the demand for polyester yarn is naturally difficult to improve.
The company has insufficient funds and the payment is collected The cycle is lengthened
There is another important reason for not buying polyester yarn, which is lack of money. Financial pressure is a problem faced by every aspect of the textile industry this year. For companies that started to expand territory and buy factories and machines in the central and western regions in 2017 and 2018, this year has been even more difficult. It is reported that after the Spring Festival, the looms of most companies in other places are not fully operational, and it is difficult to recruit workers. One company boss once said that it was difficult to recruit workers and the boss needed to drive a BMW to shuttle them to work.
When the market first resumed, the market conditions improved for a while, but the looms were not even at full capacity, let alone when the market conditions are as bad as now. Factories in other places have to support, local factories have to support, order follow-up is insufficient, inventory continues to accumulate, and the financial pressure is obvious.
At the same time, the current payment cycle is basically more than 3 months, while before it was basically within 1-3 months. The epidemic is still spreading, foreign factories are basically at a standstill, and it is unknown when they will resume work. Foreign customers face more severe situations than domestic ones. It is still quite difficult to get back the full payment for the goods that have been sent out before.
For the current textile market, it is no longer just the two mountains of supply and demand. Capital, inventory, and production capacity are all headaches, so whether polyester yarn is rising or falling, I don’t really care much. Anyway, if I don’t have an order, I won’t buy it at all unless I just need to make up a little. Only when the foreign epidemic situation can be clearly and effectively controlled and demand improves, can the market relax, and polyester yarn prices can be expected to recover while destocking.
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