Without any precaution or warning, PTA, the big brother of polyester filament, fell!
Relying on the strong supply and demand relationship and the benefits brought by the macro aspect, the price of polyester products has continued to rise since February 2021, and the increase has accelerated after the Spring Festival; however, the PTA market It rises in a hurry and falls in a hurry. On March 2, it even hit the limit with lightning speed. Before the end of February, under the influence of both cost and supply and demand, PTA hit the daily limit twice. But in March, in just a few days, PTA’s situation took a turn for the worse, and the speed was so fast that it caught people off guard. This sharp drop in prices can be said to mean success or failure.
Hidden dangers of PTA plummeting
The runaway wild horses of polyester filament are about to be reined in!
The main reason for PTA’s sharp rise was then its sharp fall. First of all, most people have seen the rise in the polyester market after January this year. It is astonishing, but few people expected that polyester prices, which had calmed down for a period of time before the Spring Festival, would be like a wild horse running wild after the Spring Festival and could not be pulled back.
At present, there is no obvious change in the fundamentals of PTA. The rise and fall of crude oil is an important line of defense. As raw material prices have reached a certain high, especially crude oil, which has experienced stagflation, bulls have taken profits in the short-term bulk raw material market, and a downward channel has naturally opened.
But excluding the impact of raw materials, the extreme reaction of the surge can only be explained by the game of funds. Do you still remember the tragic rise and fall of PTA in 2018? This overreaction will lay hidden dangers for the market outlook!
At the end of August 2018, PTA began to fall from a high of more than 9,000 yuan/ton. The reason was that high prices suppressed demand. The result was that terminal consumption was a mess during the traditional peak seasons of Gold, September and Silver. The spot price of PTA fell below 6,900 yuan/ton, the main futures contract 1901 dropped to a minimum of 6,458, and the spot processing difference was once compressed to below 300 yuan/ton.
But from now on, PTA’s surge is far less intense than that time. At least in the editor’s opinion, the plunge on the 2nd is still Low risk and will not cause a market crash.
There is no short-term pressure on polyester factory inventory
Be wary of middlemen digesting low-priced supply
As for the sharp decline of PTA, the big brother of polyester filament, compared with the previous situation where market participants were unanimously bullish about the market outlook, the voice of the polyester industry has begun to change recently, and the market has not been able to buy up. The phenomenon of buying and selling began to coexist, and the future trend became confusing. Will the massive accumulation of goods by middlemen, including traditional traders and arbitrageurs, have an impact on the market? Will the average raw material stocking time of downstream companies exceed one month affect the follow-up of demand?
Since 2021, downstream polyester production and sales have continued to be good, and polyester factory polyester stocks have dropped significantly. This is mainly due to the habit of weaving factories stocking up before the Spring Festival, especially when polyester prices return at the end of the year. With the price reaching the low level for the whole year, coupled with the continued surge in crude oil, downstream weaving factories are willing to buy the bottom. Since October last year, textile companies have made relatively good profits, so they have relatively abundant funds. As peers generally stock up, there is also some demand for stocking up.
Judging from the current product inventory of polyester factories, the inventory of filament companies is at a medium to low level. Therefore, there is not much pressure on polyester factory inventories in early March. However, the issue of relatively abundant stocking by middlemen and downstream companies will become the focus of everyone’s attention. At present, the finished inventory of gray fabrics in the downstream is relatively low. Most companies have placed orders until mid-to-late March. Most of the raw material stocking risks of gray fabric factories have been transferred. The current profit margins are good and there will not be too much resale of raw materials. Therefore, we need to pay attention to the middle in the future. When will the supply of low-priced goods from the merchant link be digested?
Regarding this price increase, someone said: “This year’s situation is relatively special. It is unlikely that polyester prices will fall back in the short term. Even if they fall later, it will be difficult to continue.” Return to the previous level.” Some terminal factories maintain a wait-and-see attitude, believing that the price of textile raw materials should fall back later. “Based on the situation in previous years, it will generally fall back in March and April.” The editor believes that although PTA and ethylene glycol fell sharply on Tuesday, from the perspective of cost and supply and demand pattern, it may be too early to say that polyester filament has plummeted. </p
