The rise of short fiber is getting better



Crude oil surged again during the Spring Festival. Short fiber benefited from rising raw materials, improved terminal demand, and its own supply bottlenecks. It is expected to continue the rise after the Spring…

Crude oil surged again during the Spring Festival. Short fiber benefited from rising raw materials, improved terminal demand, and its own supply bottlenecks. It is expected to continue the rise after the Spring Festival.

Raw materials are rising

Crude oil has performed relatively strongly recently, with Brent crude oil exceeding US$63/barrel. The core driver behind this is the recovery of global demand, with the main increase coming from Europe and the United States. , with the continuous advancement of vaccination, the epidemic situation has improved, and the number of new cases has dropped significantly after hitting a high at the beginning of the year. Taking the United States as an example, the number of people returning to work is currently 20-40% lower than the normal level before the epidemic, which means that there is still a lot of room for recovery in transportation fuel demand.

At the same time, the supply side of crude oil has maintained efficient tightening. Since February 1, OPEC+ has entered a new stage of production reduction, and Saudi Arabia has reduced production by an additional 1 million barrels per day. Judging from the production reduction implementation rate in January, the production reduction implementation rate of OPEC member states was 103%, an increase of 5% from the previous month, and the production reduction implementation effect was good. Judging from the latest OPEC+ meeting, as the outlook for oil demand is still unclear, OPEC+ will maintain a high production reduction attitude and will not waver.

In addition, during the Spring Festival, freezing weather in the United States caused the closure of oil wells in Texas, resulting in a sharp drop in crude oil production. Short-term international oil prices were once again supported by profits.

Terminal demand is picking up

In the short term, most terminals have entered the holiday payment state, polyester yarn has followed the rise in raw materials, and the rising atmosphere has driven the increase in terminal stocking. Stocking up after the Spring Festival usually takes half a month to one month.

The inventory of gray fabrics in weaving factories in Jiangsu and Zhejiang has basically remained stable. Only Haining warp knitting has a slightly overstocked inventory due to the relatively high operation of looms and the holiday of dyeing factories. With the correction of sea freight and the rise of oil prices, some factories increased export orders before the Spring Festival, but there has been no movement in domestic sales yet. During the Spring Festival, it is expected that the loom operation will be about 4%, and the texturing operation will be 13%, which is not significantly different from previous years. The resumption of work after the Spring Festival is greatly divided. Workers who celebrated the New Year in situ returned to work faster than in previous years, while workers who returned to their hometowns may return to work slower than in previous years. Overall, it is expected that there will be little difference from previous years.

In the medium and long term, in China, the “Celebrate the New Year in situ” policy has achieved results, with fewer new confirmed cases in the country and the Hebei region has also lifted its lockdown; in Europe and the United States, with the continuous advancement of vaccines, the number of newly confirmed cases has increased. Significant decline. As the temperature in the northern hemisphere continues to rise, the second wave of the small peak of the epidemic is expected to pass, and the clothing and textile industry is expected to recover. There is greater room for recovery abroad, and clothing exports will have greater room to recover by then.

Short fiber itself has supply bottlenecks

There is no doubt that the rise in crude oil and the recovery of terminal demand will drive the entire polyester industry chain. Staple fiber itself has a large supply bottleneck and is within its own business cycle, so it is the best variety to match.

Since 2018, the growth rate of short fiber production capacity has continued to decline, from 9% to 5.5%, and the growth rate of downstream consumption has maintained at 12-17%. Therefore, the industry status of the short fiber industry in the past three years is: production capacity The growth rate continued to decline, the industry’s operating rate gradually increased, and the industry’s production profit margin increased slightly. The growth rate of short fiber production capacity is expected to continue to decline below 4% in 2021. If the demand growth rate can be maintained, the supply and demand relationship in the short fiber industry is expected to tighten, and the industry is in a boom cycle.

In the short term, short fiber manufacturers are also in a state of high operating conditions and negative inventory (production orders), which proves that the supply and demand pattern is good.

Based on the above analysis, we believe that the two core factors of rising crude oil and recovery of terminal demand are expected to drive the polyester industry chain upward. Short fiber benefits from its own supply bottleneck and is in a boom. During the cycle, it is the best multi-matching variety. In the short term, as the epidemic situation improves after the Spring Festival and the textile industry recovers, the short fiber 2105 contract is expected to be profitable and continue to rise. Investors are advised to pay attention to long opportunities in PF2105. </p

This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.tradetextile.com/archives/27535

Author: clsrich

 
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