Polyester filament stocks continued to accumulate after the Spring Festival, and the production and sales of enterprises were under pressure. Prices continued to decline, falling to historical lows. Coupled with overseas public health incidents and the crude oil consumption in the three countries, the polyester filament industry fell into a downturn. However, things have turned around, and funds from outside the industry continue to pour in to buy polyester filament at the bottom, and downstream users also buy at low prices. As a result, polyester production and sales are booming, and the market situation changes around the Qingming Festival.
The highest production and sales in a single day are more than 1000%, and the mentality of bargain hunting in the industrial chain appears
The market before Qingming Festival Production and sales have shown signs of recovery. Polyester filament yarns fell to historical lows at the end of March and early April, and downstream buyers bought at low prices. In addition, some outsiders and the public showed their mentality of buying at the bottom with idle funds and stocked up in large quantities. Polyester filament yarn production and sales exploded, with single-day comparisons High production and sales are above 1000%.
Comparison of average daily production and sales rates of polyester filament before and after Qingming Festival
As shown in the figure above, polyester filament production and sales picked up on the eve of the Qingming holiday. Production and sales reached a high point on the first day of the Qingming holiday, with an average production and sales of nearly 300%, an increase of 58% from the previous trading day and an increase of 169% from April 2. %, becoming the highest single-day average production and sales rate this year. At the same time, polyester filament companies have successively raised their quotations during the holidays, with the cumulative increase ranging from 300-700 yuan/ton. However, with the decline in production and sales after the holiday, the market has fallen into a stalemate. Some companies have experienced excessive early increases and partial corrections. At present, the trading volume of polyester filament yarn is deserted, and the negotiations tend to be weak and stable.
How much is the downstream participation in this round of bargain hunting and stocking up?
Statistical data shows that the average level of raw material inventory of weaving companies is 21.1 days, increasing month-on-month 23.3%. International oil prices surged sharply before the holiday, setting the highest single-day increase in crude oil futures history. The surge in crude oil has effectively boosted the trading atmosphere, the market has increased bargain hunting activities, and the number of stocking days has generally picked up. Stimulated by this low price, downstream stocking enthusiasm is high. Some users have started stocking mode before the holiday. Most stocking days are 15-25 days, some are lower in around a week, and some are higher in about a month. The downstream continues during the holidays. To replenish positions, the number of days of raw material inventory of weaving enterprises has increased significantly, but the intensity after the holiday has dropped significantly compared with before the holiday.
Some outsiders and society’s idle funds are buying at the bottom, and polyester factories have urged Customer picks up the goods
Because most of the funds and customers buying the dip this time are outside the industry, Most of the goods are still stacked in the company’s warehouse, occupying the company’s warehouse. Therefore, some companies have recently issued delivery notices, requiring customers to take away the goods within a specified time, reducing the company’s actual inventory, and overdue goods will not be taken away. Warehouse management and other fees will be charged based on the actual situation. The delivery cycle can range from 5-7 days to around half a month, which is relatively comfortable.
Demand recovery under the epidemic is the fundamental for market change
Although polyester filament yarn seems to have ended its continuous decline in the past six months, the continuous production and sales exceeding 100 in the past few days have also boosted the current market confidence. But now production and sales continue to fall. This is still based on the fact that the basic pattern of polyester yarn is still weak, coupled with greater uncertainty in the crude oil market. Therefore, we cannot ignore the crisis behind polyester yarn.
1. Polyester inventory remains high
The most important thing that cannot be ignored is the current inventory of polyester yarn in polyester factories. According to statistics from the China Silk City Network, the overall inventory of the polyester market is now concentrated at 32-43 days; in terms of specific products, POY inventory is around 26-33 days, FDY inventory is around 27-34 days, and DTY inventory is around 27-34 days. to about 32-43 days.
Although polyester factories removed part of their inventory when production and sales were good, compared with the previous backlog of inventory, the inventory dropped in the past two days. The inventory can be regarded as “drizzle” and cannot make any substantial changes to the overall inventory. At the same time, the current load of polyester filament in polyester factories is around 75%, which is not a low level. If the production and sales of polyester filament cannot keep up with the output, the inventory of polyester filament will continue to increase, and it will be difficult for prices to continue to rise.
2. The weaving market is difficult to improve, and polyester yarns may be priced but not available. Market
For the current market conditions, most companies only shake their heads or sigh. . Especially in the foreign trade market, most companies have almost come to a standstill. It is very difficult to switch from foreign trade to domestic trade in the current sluggish market. Foreign trade orders are frequently canceled, and domestic trade demand is difficult to recover. The fabric market demand is extremely shrinking, and order follow-up is seriously insufficient, which directly leads to traders’ demand for gray fabrics, which in turn affects the weaving market. It is difficult for the weaving market to improve. Therefore, no matter how strong the price of polyester filament is, it will eventually face a situation of price but no market.
Finally, compared to the price war, the epidemic has suppressed global energy demand The cycle may be longer, even if the production reduction agreement is reached, the reduction will be 1,000-1500 million barrels of supply plan, and then in view of the impact of the current global public health event, the assessment of the decline in crude oil demand is 25 million barrels. Therefore, the impact of the production reduction agreement on the market is short-lived, and the situation of global public health events still needs to be paid attention to in the medium and long term. and the degree of demand recovery afterwards.
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