The prices of all products may rise for a while but not forever. It is not uncommon for prices to rise in the morning and then fall in the afternoon. After all, there are too many factors that affect the market. Take crude oil, which has been hot in the past few days, for example. It was still rising sharply on the evening of March 8th, but it plummeted on March 9th… It’s simply shocking. Let’s take a comparison chart to sigh!
Due to the impact of drone attacks on Saudi oil processing facilities, on the 8th, the United States and Burundi Oil jumped higher. WTI crude oil futures stood at US$67/barrel for the first time since October 2018; according to Reuters quotes, Brent crude oil futures rose above US$71/barrel at the beginning of the session, with an intraday increase of 2.3%. Oil prices have reached a 15-month high. However, only one day later, the originally anxious market quickly returned to calm. As of the close, international crude oil fell back from its highs, with WTI crude oil futures plunging 1.97% to US$64.79/barrel, and Brent crude oil contract falling 1.79% to US$68.12/barrel, with a huge intraday shock of 5%!
Polyester raw materials staged a “face-changing” drama
Under the influence of such a sharp rise and fall in international oil prices , PTA, ethylene glycol and other polyester raw materials also staged a “face-changing” show.
On March 8, PTA futures rose sharply again, with an increase of more than 200 points at the opening, an increase of more than 4%. As a result, on the 9th, PTA futures suddenly fell by 162 points, or 3.37%.
Similar to PTA, ethylene glycol has been affected by international oil prices and has also experienced ups and downs, with the range of increases and decreases keeping pace with PTA.
On March 8, the main ethylene glycol futures contract rose by 354 and 130 points respectively, an increase of 4.2%. On the 9th, it fell by 147 points, a decrease of 2.47%.
Compared with PTA and ethylene glycol, the price of polyester filament is relatively much stronger. After the sharp rise and fall of polyester raw materials, the price can basically be stabilized, even for some polyester The factory continued to raise prices on the 9th.
But the editor feels that although the upstream raw materials are rising and falling at a high level, judging from the multiple benefits that exist in the current market, polyester yarn will still remain in the future. There is a possibility of an increase, mainly due to the following points:
1. Although the short-term increase is too large, the start of the off-season has laid a price foundation for the peak consumption season. In the next 2-3 months Prices will remain high;
2. Pay close attention to traders’ inventory digestion, late March to April are sensitive months;
3. Pay attention to the actual intensity of inflation. If all prices rise, raw material prices will reach a new high level;
4. Raw material prices are expected to return to normal in the second half of the year. Reason: GDP Year-on-year growth is slowing down, demand suppressed by high costs is declining, there is a high probability that historical highs will be adjusted back, new production capacity will be released, and cyclical characteristics will also appear.
Although it is common for raw materials to rise and fall, it may fall today and rise again tomorrow. So what do the downstream textile bosses think?
I am worried when it goes up and when it goes down, I dare not take orders or produce!
For textile companies, what they fear most is not price rises or falls, but price instability. “If you buy raw materials at a high price and the price drops when they are produced, it will be like a punch in the stomach.” said an old master who has been engaged in textiles for more than ten years.
As for the future trend of raw materials and fabrics, he plans to wait and see while clearing inventory. “If the price of raw materials continues to rise, we will not dare to do it, and production will stop first. It will last until the end of March at most, and then we will start to clear the inventory and withdraw part of the funds.”
Another cloth boss also said helplessly: “We didn’t stock up on a lot of raw materials a year ago, who knew The price of raw materials has gone crazy since the beginning of the new year. The prices of the orders we received were all negotiated years ago, but now the price of raw materials has gone up so crazily, we can only ask our customers to raise the price. Many customers don’t accept it, and neither do we. The solution, after all, we are old customers who have cooperated with us for many years, so both parties can only make some concessions. The cloth that was originally going to be increased by 5 cents, the old customer only increased by 3 cents.”
From this point of view, the rise and fall of raw materials has brought a lot of troubles to cloth owners. Especially some companies that make low-end fabrics and have high inventories have weak bargaining power. When raw materials rise, the price of gray fabrics does not dare to rise. When raw materials fall, However, it frequently suffers from price cuts.
In short, the market is ever-changing and raw material price changes are difficult to predict. Whether it is “chasing the rise” or “buying and using as you go”, textile people have a clear idea in their minds. No matter what strategy you adopt to purchase raw materials, the one that suits you is the best! </p