The hype about “hot air cotton” has intensified during the week. Substitutes for its raw material ES low-melting fiber are also emerging one after another. Large chemical fiber and chip spinning are also hot topics. As the price of non-woven materials in small fields is getting higher and higher, other Major downstream spinning mills face the risk of production suspension due to high raw material prices; rising prices that are divorced from fundamentals also make the risk increasingly greater.
National recycled PET average price trend chart
Recycled PET prices during the week are continuous The main reason for the increase is that polyester chips and polyester staple fibers have risen due to the hype of hot-air cotton. As the raw material of ES fiber, low melting point staple fiber began to grow rapidly in early April. When the raw material of low melting point staple fiber was in short supply, the market began to seek polyester staple fiber as a substitute, causing the price to rise all the way.
As the news spread to the recycling field, the aftermath still caused the price of recycled bottle flakes to continue to rise. Looking back at market fundamentals, WTI crude oil fell below 20 US dollars per barrel, the overseas epidemic showed no signs of improvement, terminal weaving orders were deserted, and weak fundamental demand indicates increasing risks. In terms of domestic polyester, because hot-air cotton has risen sharply away from its fundamentals, the largest terminal textile industry cannot accept the sharp rise in raw materials. The operating rate has continued to decline, and some companies have stated that they have plans to suspend production in the near future.
Slicing hype subsides, prices return to rationality
Hot-air cotton products are hot during the week, with polyester chips and polyester staple fibers as alternatives to low-melting point chemical fibers Product prices have been rising away from fundamentals. The terminal weaving industry has been unable to accept excessively high raw material prices, and the operating rate has continued to decline. WTI crude oil fell below US$20/barrel, orders for the weaving industry were deserted, and the weak fundamentals reminded the high risk of polyester chemical fiber. In the short term, there is a reasonable price difference between sliced and recycled bottle flakes, but in the long term, beware of a double dip. risk.
Weaving operating rate declines
As of April 16, the national cotton textile comprehensive start-up rate is 40.55 Around %, a month-on-month decrease of 1.51 percentage points. For air-jet looms, the average operating rate was 42.78% (revised to 43.89% last week).
Terminal demand is asymmetric, dyeing factory orders have shrunk significantly, foreign trade weaving mills have either stopped working or are processing under pressure, and domestic trade companies have orders in hand, which can last until the end of the month. However, it is difficult to sign new orders under bidding pressure, which is common. Shipments are under pressure, and the machine load has declined again under the tight financial situation. For circular knitting machines, the average operating rate is 38.32%. Most companies are still on holiday or at low load, and some companies have seen a slight rebound in operations due to support from certain domestic trade orders.
To sum up, the current hype on polyester chemical fiber caused by hot air cotton has shown signs of subside, and the stocks of polyester raw materials PTA and ethylene glycol remain high. Although the epidemic situation in the EU has been temporarily alleviated, it is still far from being completely lifted. In the short term, foreign trade orders may improve slightly, but the epidemic situation in many countries has not yet reached its peak. Overseas demand as a whole is still weak, and the crazy growth in small fields cannot be solved. The main downstream demand side is weak.
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