The recent market conditions are sometimes like a helicopter, sometimes like a roller coaster, sometimes like jumping off a cliff, sometimes like a free fall… there are big ups and downs, and you are caught off guard!
Since the beginning of 2021, the price of Brent crude oil has almost doubled. After the recovery of the epidemic and the production cuts by OPEC+ countries, international oil prices have continued to rise, once exceeding US$70. close.
However, the good times did not last long. On March 8, international oil prices fell significantly and then began to fluctuate. Although Goldman Sachs and other institutions predict that crude oil will reach $75 this year, the short-term “ceiling” effect is apparent. As the leading variety in the futures chemical sector, crude oil is naturally an important standard for dominating the market! In recent days, there has been a stalemate in the market, and polyester production and sales seem very frustrated, but in the end it still depends on the “face” of crude oil.
Crude oil sneezed, and textile raw materials suffered a collective cold! The prices of the main contracts of PTA and ethylene glycol futures have been on a “roller coaster” in recent days, with prices falling sharply in the second week of March.
As we all know, the polyester market has been booming recently. Since February, mainstream manufacturing companies have increased their product quotations one after another. Many factory prices have increased twice or three times a day, and there are even phenomena of reluctance to sell and wait for price increases. As of March 10, the price of PTA has increased by 495 yuan/ton, the price of ethylene glycol has increased by 950 yuan/ton, the price of polyester FDY 150D has increased by 1,150 yuan/ton, the price of polyester POY 150D has increased by 1,950 yuan/ton, and the price of polyester has increased by 1,950 yuan/ton. The price of DTY 150D increased by 1,600 yuan/ton.
On the one hand, taking advantage of the east wind of crude oil, on the other hand, an important reason is that Biden The 1.9 trillion monetary policy stimulated the collective rise of bulk raw materials and supported the market of textile raw materials. Now that crude oil is gradually reaching its “ceiling” and US$1.9 trillion of “money” is just around the corner, will monetary easing stimulate the rise of raw materials?
Just waiting for Biden to sign!
The US$1.9 trillion stimulus bill was passed by the House of Representatives
The budget deficit hit a record high for the same period
According to Xinhua News Agency, the U.S. House of Representatives voted to pass the final version of the $1.9 trillion economic rescue plan on the 10th local time. The plan will be submitted to U.S. President Joe Biden to be signed into law.
The dust of the stimulus bill has settled, and as U.S. bond yields continue to fall, the Dow Jones Industrial Average rose by more than 460 points. Hit another record high.
According to reports, Biden has great confidence in this economic rescue plan. He said that the plan can increase the U.S. gross domestic product. $1 trillion.
Stephen Stanley, chief economist of American securities company Amherst Pierpont, said that the government’s economic rescue plan will “give a shot in the arm to the U.S. economy in a short period of time,” but this This effect will gradually fade. At that point, the reopening of the economy and a return to normalcy will begin to take over.
However, it is worth noting that when the U.S. economic situation improves, many U.S. economic experts have warned about the current situation, because in a short period of time Such a recovery may lead to inflation.
While receiving government subsidies, many American companies are worried that in order to cover the growing deficit, the Biden administration is likely to increase tax rates for companies and investors.
According to a report released by the U.S. Department of the Treasury that day, the U.S. budget deficit in February was US$310.9 billion. Since the U.S. fiscal year begins in October, this makes the first five years of the 2021 fiscal year The budget deficit last month reached $1.05 trillion, a record high for the same period. The U.S. Congressional Budget Office said that a new round of economic rescue plans will further expand the deficit this year.
“1.9 trillion” soldiers and horses have not yet moved food and grass first
Why are the prices of raw materials soaring? What should be done next?
As we all know, the US dollar inflationary pressure generated by the US$1.9 trillion in additional currency issuance by the United States will be paid by the world. If the currency is loosened, bulk raw materials will be the first to bear the brunt! Recently, I have seen various product price increase notices in almost all circles of friends, or everyone has been discussing the recent price increases. Affected by the “supply shortage” factor, the prices of raw materials such as copper, iron, aluminum, and plastics have continued to rise; Due to the collective closure of large-scale oil refineries around the world, chemical raw materials have soared almost across the board… The affected industries include furniture, home appliances, electronics, textiles, tires, etc.! Since the Spring Festival, almost all major markets around the world have not risen!
But from the perspective of the industrial chain, after the news that the United States released US$1.9 trillion in water in the early stage, various raw materials jumped. Friends who have been doing textiles for a long time are all After experiencing a domestic economic stimulus of 4 trillion yuan, various raw materials have increased, but this time the United States has not actually started to print money like crazy. How could it be transmitted to our domestic related industries so quickly? Why do price increases over the years always start from the raw material side?
In fact, it is mainly because the raw material end has benefited from the supply-side reform, resulting in more concentrated production capacity, and due to the continued shrinking of demand, low-price competition for end products has made hot money unprofitable. blessingFueled by the media and the media, commodities are being speculated as investment products. Driven by excess liquidity and profiteering, capital and material companies conspired to hunt down the masses again and again.
Everyone knows that the most important factor in product price increases is the relationship between supply and demand. The current global epidemic has reached an inflection point, and the global economy, which has been stagnant for a year, has hope of improvement. Our domestic companies After the reshuffle of last year’s epidemic, a group of small and medium-sized enterprises with broken capital chains were eliminated. The surviving high-quality enterprises are working at full capacity this year. China’s economic recovery has been hit by this wave of price increases. Cold water, all kinds of bulk commodities are rising crazily, and the price of raw materials is changing every day, which makes companies unable to control costs. Downstream companies dare not take orders or start production. Some downstream companies start production, which means they have to produce at a loss. They simply stop taking orders and wait and see. Price increases will inevitably lead to Demand has decreased. The result of the decrease in demand is that the supply of raw materials exceeds demand. According to the usual rules, the sharper the rise, the faster the fall. In the face of such crazy raw material price increases, I hereby advise everyone to hoard raw materials and rationally analyze the future demand situation. . In the past two days, led by the fall in international crude oil prices, domestic and foreign bulk raw material prices have collectively fallen. It can be said that crude oil sneezes and textile raw materials collectively catch a cold!
In the short term, some rapidly rising raw materials will have an adjustment and decline, but we feel that as the global epidemic situation improves, it is certain that the industry’s prosperity will improve in the first half of the year. Because inventories are generally at historical lows, the boom is expected to remain at a high level in the second half of the year.
In the long term, we believe that not only chemical fiber, but also many industries have shown the characteristics of optimizing the industry structure and strengthening the competitive advantages of leading enterprises. In the next 5-10 years, all walks of life will It is a window period for leading companies and brands to accelerate their formation. If you look at the polyester industry, you will know that all subdivided industries will move in this direction in the next few years. Therefore, everyone takes advantage of this period to adjust their strategic direction and position themselves well. When the prices of products and brands skyrocket, it is also a big test for suppliers. I have personally seen many short-sighted peers lose loyal fans during the skyrocketing prices, offend a large number of old customers, and cause business to plummet after the price increase. So at this time It is testing the strategic vision of the merchants, whether it is for immediate benefits or long-term benefits! </p
