Recently, Saudi Arabia announced that it will “voluntarily” cut production by another 1 million barrels in addition to the OPEC+ plan, in order to maintain the stability of the global energy market. For a time, oil prices rose violently, skyrocketing by 300% since 6.5 US dollars per barrel!
While crude oil has surged and plummeted, and is still heading towards an upward trend in the medium and long term, domestic chemical raw materials have finally ended their growth. After the price decline in the first quarter, the surge in oil prices drove up the prices of PTA and ethylene glycol.
With the price of polyester raw materials rising sharply, the production and sales of polyester yarn once reached nearly 200%, and the phenomenon of closed sales once again occurred. A new round of market conditions has arrived, so can this round of market conditions continue?
U.S. crude oil broke through US$30 and became an important support. Goldman Sachs: Oil prices are unlikely to fall sharply
Promoted by the OPEC+ oil-producing countries led by Saudi Arabia to reduce production and signs of demand recovery, the market has become optimistic about the demand outlook for the oil market, and international crude oil futures have rebounded strongly.
There are also some bright spots on the demand side as the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers cut production. Data released on Friday showed that China’s daily crude oil demand rebounded in April as refineries ramped up production. But market sentiment remains cautious as the coronavirus pandemic is far from over and new clusters of infections are emerging in countries that are lifting lockdowns.
Production cuts will accelerate the pace of global destocking. The U.S. Energy Information Administration (EIA) said on Wednesday (May 13) that U.S. crude oil inventories fell for the first time in the week ended May 8 after 15 consecutive weeks of increases. On the 18th, U.S. crude oil broke through 30 US dollars in 06. This is the 300% increase since 6.5!
Wall Street investment bank Goldman Sachs said that as the market returns to balance faster, the new coronavirus lockdown is gradually lifted and production decreases faster than expected, the risk of a sharp fall in oil prices has decreased.
Goldman Sachs said the area where demand has improved the most is still in road transport using gasoline, in countries such as China, the United States and Germany, but reiterated that it will take time to return to normal levels.
We believe the next stage of oil market rebalancing will be range-bound spot prices, with the most obvious changes being a decline in implied volatility and forward prices, Goldman Sachs said. Without rising yet, the futures curve continues to flatten.
Downstream demand is recovering in stages, and weaving orders are coming after a long drought!
As oil prices rose, polyester manufacturers spread rumors of price increases. Weaving companies took advantage of the price increase to buy raw materials. Then traders placed orders because they saw the price increase of raw materials. This is how a wave of market conditions occurred. . However, in the face of possible price increases, will weaving companies continue to buy it? Do weaving companies have the ability to buy it? In the final analysis, it still depends on the recovery of market demand.
In terms of operating rate, after entering May, the operating rate of water-jet looms in Jiangsu and Zhejiang has increased from 65% to about 70%. The operating rate has increased, and the demand for polyester raw materials has increased. Demand will naturally increase.
The inventory of gray fabrics in weaving companies has also gradually decreased. It has dropped by about 2 days from the highest point in late April. Now Gray cloth inventory lasts about 40 days.
Manager Shi, the person in charge of a company that produces Oxford cloth, said: “We originally planned to increase the number of stores after the Labor Day holiday in May. However, we did not expect that when raw material prices rose in early May and several new orders were received, the original production reduction plan was naturally shelved.”
Five Weaving Enterprises The increase in the number of monthly orders is not unique. Manager Zhou, the person in charge of an air-jet weaving manufacturer, also said: “I recently received orders for 100,000 meters of Tencel and some cotton fabrics. Although it is still much worse than the previous two years, But compared with March and April, the situation in May is really much better.”
It can be said that after entering May, the textile market finally looks like a traditional peak season. , traders began to move, and weaving companies finally received long-awaited orders. Under such circumstances, in the face of rising raw material prices, Boss Bu also has the strength to buy into it.
Polyester raw materials have strong momentum, is the price increase really coming?
The chemical fiber raw material market has finally cleared away the gloom and “sees the light of day again”. The market is rising strongly. Does it mean that a new wave of price increases will come? !
The demand for midstream and upstream raw materials has shown signs of recovery. At the same time, the epidemic situation abroad has shown signs of being controlled in some parts of the world. In addition, Europe and the United States and other countries have focused on intensively launching economic recovery or monetary stimulus policies, and external orders for end products in some industrial chains have begun to show signs of recovery. These factors are all driving the post-holiday polyester raw materials. important reason for the price increase.
But the virus is still cunning, and we still need to be alert to the possible impact of a counterattack on businesses. At the same time, since the outbreak of the epidemic, Western countries led by the United States have frequently blamed China. They must always be wary of the recurrence caused by the restart of the Sino-US trade war.
As domestic trade demand has begun It is picking up quickly, but the recovery of foreign trade will take time. Therefore, it will still be difficult for the textile market to get rid of the situation of “walking on one leg” in the future. without showing off�In this situation, the so-called market may just be a cycle after another. </p
