Oil surged strongly during the Spring Festival holiday, with Brent crude oil exceeding US$63/barrel, providing strong support for polyester raw materials; while the supply and demand fundamentals of polyester staple fiber itself continued to be good. On the first trading day after the holiday, the spot price of polyester staple fiber futures It has increased significantly. Can polyester staple fiber continue to rise based on optimistic fundamentals? Can the speed of downstream resumption of work and production and the situation of terminal orders support the continued outbreak of short fiber market? How is the cotton market performing after the holidays?
01. On the first trading day after the holiday, polyester staple fiber futures spot prices rose strongly
First look at polyester staple fiber companies during the Spring Festival holiday start-up status. According to the practice in previous years, the operating rate of downstream spinning mills usually drops to the bottom during the Spring Festival holiday. However, this year because some employees celebrate the New Year on the spot, some spinning mills do not stop work or start work earlier. In addition, polyester staple fiber factories are more oversold before the holiday. Against the background of good processing fee space and no inventory pressure, there will not be many short fiber factory maintenance during the Spring Festival holiday in 2021.
Based on comparison with previous years, during the Spring Festival in the past, the operating rate of short fiber companies would drop to around 70% or lower. However, this year, the operating rate of polyester staple fiber companies only dropped to around 80%, or even to 2 In late March, the industry’s operating capacity returned to 90%.
But it would be a mistake to think that a substantial increase in production will increase the level of post-holiday inventory accumulation. Most staple fiber factories were oversold before the holiday, and some major mainstream factories were even oversold by 40-50 days. Although there was a slight accumulation of inventory during the Spring Festival holiday, the sharp rise on the first trading day after the holiday once again promoted the increase in factory orders. First, short fiber companies are still in a good situation of negative inventory, and most large manufacturers even continue to control sales. Therefore, there is still no pressure on the supply side.
Data source: Longzhong Information
Furthermore, this year’s downstream The resumption time is earlier than the same period in previous years. Some yarn mills in Changle, Fujian Province have already started operations on the fourth day of the Lunar New Year. By the seventh day of the Lunar New Year, the local operating rate has reached 60%-70%. In previous years, the yarn mills basically did not start operations until the eighth or even the fifteenth day of the Lunar New Year. will gradually pick up; and the domestic and foreign trade orders of spinning mills are supported, and the shortage of containers that restricted foreign trade orders in the early stage has gradually eased, and most orders from spinning mills can be executed until late March. In addition, yarn prices generally rose after the holiday. On the first trading day after the holiday, the price of pure polyester yarn in Changle generally increased by 800 yuan/ton to 12,600 yuan/ton compared with before the holiday.
So this round of rise is the result of upstream and downstream resonance.
02. Polyester staple fiber itself has supply bottlenecks
The rise of crude oil and the recovery of terminal demand have a negative impact on the entire polyester industry chain. The pull is unquestionable. Polyester staple fiber itself has a large supply bottleneck.
Since 2018, the growth rate of polyester staple fiber production capacity has continued to decline, from 9% to 5.5%, while the growth rate of downstream consumption has remained at 12%-17%. Therefore, the growth rate of the staple fiber industry in the past three years has been The status of the industry is: production capacity growth continues to decline, industry operating rates gradually increase, and industry production profit margins increase slightly. In 2021, the growth rate of polyester staple fiber production capacity is likely to continue to decline below 4%. If the demand growth rate can be maintained, the supply and demand relationship in the polyester staple fiber industry will continue to tighten, and the price of polyester staple fiber will be further supported.
03. U.S. cotton surged during the holidays, and Zheng cotton exceeded the 16,000 mark
Before the holiday, the USDA supply and demand report was released The US cotton export data performed better, setting a positive tone. On February 10, the supply and demand report released by the U.S. Department of Agriculture increased global production from 112.87 million bales in January to 114.15 million bales; but at the same time, global cotton consumption increased by 1.5 million bales to 117.2 million bales; exports increased from 112.87 million bales in January to 114.15 million bales. The number of 43.56 million bales was increased to 43.9 million bales, mainly due to the significant increase in demand from China and India; the ending inventory was reduced from 96.32 million bales in January to 95.74 million bales. From this point of view, the market is optimistic about the new season cotton. Inventories are relatively optimistic, which is also based on expectations of macro-environmental preferences. Coupled with market expectations that the United States will introduce additional stimulus measures, U.S. cotton performed better. During the Spring Festival holiday, U.S. cotton hit a two-and-a-half-year high, with ICE cotton rising 2.56%.
Figure: Futures market performance on February 18, polyester staple fiber futures closing price was 7,734 yuan
Boosted by the strong external market, Zheng Mian jumped short and opened higher on the first trading day after the domestic holiday. The overall atmosphere of domestic products is hot, and Zheng Cotton has been further driven. The closing price of CF2105 was 16,005 yuan/ton, an increase of 2.04%; polyester staple fiber increased by more than 9.02%; cotton yarn futures also rose all the way.
04. 100 million people “celebrate the New Year on the spot”, and the Spring Festival retail and catering consumption is off to a good start
The Spring Festival is a time to observe China’s economic vitality an important window. During the Golden Week of the Spring Festival, under the initiative of “Celebrating the New Year on the spot” in various places, 100 million people celebrated the New Year on the spot and became “original year people”. Festival consumption continued unabated and consumer demand was concentrated. According to the Ministry of Commerce’s website on the evening of February 17, according to monitoring by the Ministry of Commerce, from New Year’s Eve to the sixth day of the first lunar month (February 11-17), the country’s key retail and catering companies achieved sales of approximately 821 billion yuan, an increase from last year’s Spring Festival Golden Week. 28.7%, an increase of 4.9% compared with the 2019 Spring Festival Golden Week. During the Spring Festival, large paymentThe agency monitored the sales of catering merchants to increase by approximately 1.3 times year-on-year. Celebrating the Chinese New Year in situ has driven a substantial increase in the consumption of home furnishings, with sales of traditional products such as home appliances and seasonal clothing booming. During the Spring Festival, the Ministry of Commerce monitored the clothing sales of retail enterprises to increase by 107.1% compared with the same period last year.
Gu Xueming, director of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, said: The “good start” in consumption during the Spring Festival reflects that my country has great potential to promote consumption and has broad space to expand domestic demand. The momentum of high-quality economic development is strong, and the domestic circulation is smooth and efficient. The huge domestic market and the continuously upgrading consumption structure are the potential, vitality and advantages of China’s economic development, and are important supports for building a new development pattern.
05. Looking forward to the market outlook
In the short term, polyester staple fiber manufacturers are also in a state of high operating conditions and negative inventory. , which proves that the supply and demand pattern is good. The market outlook still needs to pay attention to the price difference between direct-spun staple fiber and recycled staple fiber, cotton and viscose staple fiber. At present, the price difference between direct-spun staple fiber and recycled staple fiber has reached more than 1,500 yuan/ton. If the price difference continues, the substitution advantage of recycled staple fiber will gradually become more prominent; however, the price difference with cotton and viscose staple fiber is still 8,900 yuan/ton. tons and 7,500 yuan/ton level. Compared with cotton and viscose, the price advantage of polyester staple fiber is acceptable, so the subsequent potential crisis should be the potential substitution risk of recycled staple fiber. From the perspective of supply and demand fundamentals, polyester staple fiber is in an optimistic market that is easy to rise but difficult to fall.
Luzheng Futures stated that the pre-holiday trend of the domestic cotton market mainly follows the fluctuations of foreign cotton. According to the practice in previous years, the operating rate of downstream yarn mills usually drops to the bottom during the Spring Festival holiday, but this year the New Year is celebrated on the spot. The post-holiday start-up will accelerate to create conditions, which is conducive to the recovery of the downstream cotton textile market, and the low downstream textile inventory is conducive to cotton demand. As spinning mills and weaving mills gradually start operations after the holiday, cotton demand will gradually recover. Coupled with the strong external market and the improvement of the macro environment Optimistic expectations are that cotton prices are expected to rise strongly after the holiday.
In the medium to long term, the “Celebrate the New Year in situ” policy has achieved results, with fewer new confirmed cases in China and the Hebei region has also lifted its lockdown; in Europe and the United States, with the continuous advancement of vaccines, the number of new confirmed cases has increased significantly. fall back. As the temperature in the northern hemisphere continues to rise, the second wave of the epidemic is expected to pass, and the clothing and textile industry is expected to recover. There will be greater room for recovery abroad, and clothing exports will have greater room to recover. </p
