The Golden Three peak season is approaching, but nylon orders are not as good as expected. The sensitive textile market is no longer able to chase the rise. Faced with the surge in raw materials after the Spring Festival, the market has become more wait-and-see and more troubled.
The cost side is boosted, and nylon yarn actively follows the rise
Figure 2020-2021 nylon industry Changes in chain price trends
Source: Longzhong Information
After the Spring Festival in 2021, driven by the strength of crude oil, domestic commodities collectively rose sharply, and the prices of nylon industry chain products once exceeded the highest price in 2020. In early March, due to excessive price increases in some commodities, the pure benzene market softened after a reasonable correction, and market confidence weakened. Some factories and traders began to loosen shipment prices. However, the subsequent OPEC+ meeting decided to reduce the current production scale. It will be maintained until the end of April, and Saudi Arabia will still cut an additional 1 million barrels per day of production. The negative expectations before the meeting that an overall increase in production may not be realized, and international oil prices rose sharply. Driven by positive macro factors, the cost of nylon remains strong.
Source: Longzhong Information
Since the start of production after the Spring Festival, nylon filament prices have actively followed the rise. The main reason is strong support from the raw material side and rapid cost increase is the fundamental factor. Before the Spring Festival, the price of pure benzene increased due to factors such as the failure to restart its own equipment. The supply of pure benzene in March is expected to be tight, which is still favorable and supportive for the price. The caprolactam market continues to have tight supply and low inventory. Under the support of supply and demand, if upstream raw materials There is little change, and the caprolactam market can still remain high and strong.
Raw materials are rising, and the wait-and-see attitude of downstream terminals is increasing
After the Spring Festival, polyester, nylon, and viscose Chemical fiber raw materials have risen sharply, especially spandex. Currently, there is still room for slight upward exploration in various raw material markets. Prices have increased, but orders have been few and far between. In early March, the overall growth rate of end-use weaving operations slowed down. In the face of high-priced raw materials, the downstream sentiment for chasing prices was not as good as expected. The industry was mainly worried about unstable prices, and if they rushed up, they would inevitably fall down. Most downstream companies have inventory before the Spring Festival. At present, except for those who just need to get goods, they are more cautious in trading.
Domestic and foreign demand has not yet opened up, and foreign trade orders are still weak. Although the epidemic situation in Europe and the United States is progressing better than in the previous period, it is still a wall hindering the foreign trade market in a short period of time. According to Reuters, clothing retailers in Europe and the United States are sitting on excess inventory and are cutting spring orders. Some traders believe that the current wave of orders is actually an overdraft of subsequent orders. “Even if vaccination gradually becomes popular, the recovery of market demand in Europe and the United States will still be relatively slow. They are worried that the orders during this period are actually an overdraft.” The subsequent orders will be even more difficult during the off-season.”
Looking at the domestic market, after two years of decline and low fluctuations, the market has become accustomed to low-priced raw materials. This wave of raw materials Most of the price increases began to gain momentum before the Spring Festival. After the holiday, downstream textile companies had not resumed work and production, and raw materials had already risen to a high level and were still rising. After the downstream work resumed, they were caught off guard and could only wait and see. Market transactions remain low, and there is greater resistance to high-priced materials, and new orders are particularly cautious. If downstream stocks release low-priced pre-holiday inventory, sales pressure will be great throughout March.
To sum up, after the nylon yarn market rose to high prices, mainly small orders were traded, and caprolactam still remained in the short term. To explore the trend, the market voice is still in the hands of the upstream. Weaving demand has not yet recovered significantly. Can there be a turn in the traditional peak season of gold, silver and silver? While paying attention to the changes in raw material prices, we also pay attention to the follow-up of foreign trade orders in late March. And the inventory consumption of terminal weaving products. </p
