Last week, oil prices plummeted for a long time, and the spot prices of PTA and ethylene glycol also fell sharply. The polymerization cost dropped to 5,379 yuan/ton, and the cash flow of polyester filament POY150D/48F reached 1,245.60 yuan/ton. However, on Monday this week It fell to 957.90 yuan/ton. Under the restraint of terminal demand, market procurement expectations are sluggish, and polyester filament production and sales fell to freezing point last week. This week, although there is strong support for polymerization costs, most downstream prices are in the wait-and-see stage, and the trend of polyester filament is expected to be weak.
Figure 1 Daily production and sales trend of polyester filament:
Data source: Longzhong Information
Since the 10th of this month, the profits of polyester filament POY150D/48F have continued to rise, with the highest point reaching around 1,200 yuan/ton last Friday, and then there was a slight downward trend on Monday.
Although polyester filament has a strong advantage in terms of profit, the terminal demand for goods is less than expected, coupled with the low production and sales data for two weeks, resulting in the inventory of upstream polyester factories. A small amount has been accumulated. Although some factories have price reduction promotions, the production and sales situation is not optimistic. On the one hand, because most downstream users have a stocking cycle of around 30-60 days, they currently prefer to consume raw materials on hand. In addition, domestic and foreign demand orders are weak, and procurement The raw material cycle will be delayed; on the other hand, the year is off to a good start. Upstream textile raw materials continue to rise. The increase and the rising cycle are beyond expectations. As a result, buyers and sellers are unable to negotiate prices, and profits are compressed to low levels or even losses. Domestic customers are cautious in taking orders. .
Although upstream textile raw materials are bound to decline in the near future, considering that the textile off-season in April is coming, polyester filament stocks are expected to increase slightly in April.
Figure 2 Polyester filament cash flow and price trend chart:
Data source: Longzhong Information
After the Spring Festival, downstream weaving quickly resumed work and production, and the operating rate increased rapidly. At the end of the year, most foreign employees responded to the call of the local government and stayed here for the New Year, which promoted the start of local weaving.
The first quarter of 2021 was supposed to have a perfect start, but there has been a serious lack of orders since mid-March. Domestic spring clothing orders have been placed, but the quantity is low. Foreign orders are showing a certain freezing trend. Although the prices of upstream raw materials have increased significantly and some orders have been delayed, this is ultimately due to sluggish demand.
In the future, weaving operations will remain stable, and the stabilization period is expected to be longer, and the complete release of demand may be around the middle of the second quarter.
Figure 3 Comprehensive start-up rate of chemical fiber weaving in Jiangsu and Zhejiang regions:
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