With the impact of the epidemic after the holidays, polyester raw materials such as PTA are giving profits to downstream polyester. Starting last week, polyester manufacturers also began to reduce prices slightly to promote filament yarns. However, although downstream and terminal factories and companies have resumed work one after another , but the overall load increase is relatively slow, the wait-and-see attitude in the market is obvious, and the overall production and sales data of polyester filament factories are relatively light.
On the 3rd, the market experienced a major reversal, affected by the sharp rise in crude oil. , the polyester filament market production and sales in Jiangsu and Zhejiang regions have recovered significantly. The average production and sales of mainstream manufacturers are 80%-150%, and the production and sales of some better factories can reach 200-300%.
Following the global outbreak of the COVID-19 epidemic last week, the spot and futures markets for polyester raw materials have fallen sharply, resulting in a lack of support on the cost side. The market has been operating smoothly recently, and there seems to be signs of bottoming out, and the pessimism caused by the new crown epidemic has weakened.
The contradiction between the sharp drop in costs has been basically resolved; does that mean that the market will usher in a periodic rebound?
The main factor suppressing the rebound in the near future: the high inventory pressure of polyester products
The current downstream resumption time is relatively late. The supply and demand pressure of ester factories is high, and the inventory pressure of polyester products is currently high. According to data, the overall inventory of the polyester market is concentrated at 32-42 days; in terms of specific products, POY inventory is 26-32 days, and FDY inventory is 27-33 days. Nearby, while DTY inventory is around 33-42 days.
If actual inventory is taken into account, some factories are still a week or more higher. It is reported that terminal orders after the holiday are less than last year, and there is still a certain amount of raw material inventory at this time, and there is no obvious intention to continue to replenish positions. This will gradually feed back to direct demand. It is still difficult to be optimistic at present. The contradiction between supply and demand is temporarily difficult to digest, and this is also the main factor that suppresses the height of the rebound in the near future.
We believe that as the subsequent epidemic situation gradually improves, market sentiment will gradually return to calm. However, the current specific resumption of work of terminal weaving enterprises has quickly resumed, but market orders have a larger impact. Due to the uncertainty, we are still wary of purchasing, so the short-term market is still volatile.
Risk factors shift from domestic to foreign, and trade orders become particularly critical
As domestic With the gradual control of the epidemic, risk factors have shifted from domestic to foreign countries, and the market has become particularly concerned about the impact of foreign trade. So, how much impact will the new crown epidemic have on textile foreign trade?
In fact, some companies in the textile industry are facing operational difficulties. After finally ushering in a wave of resumption of work across the country, the new coronavirus outbreak began to occur around the world. Boss Bu encountered another bumpy road in accepting orders, especially for foreign trade companies. Currently, Japan, South Korea, Italy, Iran and other countries are the most severely affected by the epidemic.
These regions and our country are the main import and export places for textile trade. It is understood that many orders have been canceled due to the epidemic recently, especially for foreign trade companies. The person in charge of a foreign trade company complained: “Recently, we have indeed encountered customers canceling orders, which has a great impact on our company. And most customers are waiting and watching, and there are very few orders.”
At the same time, taking marine oil, which represents the demand for shipping terminals, as an example, due to the impact of public health emergencies, transportation demand in the coastal shipping market fell to a record low. In February, the BDI index fell from a high level. The average BDI of the Baltic Dry Bulk Freight Index was 457 points, a month-on-month decrease of 258 points or 36.08%.
The BDI index fell to a low this month and then rebounded slowly. Freight rates of all major ship types have declined, especially the capesize ship index which fell deeply into the negative range for the first time. The international shipping market is very sluggish. With freight transportation light, the overall sales volume of marine oil has dropped significantly. The market has changed from an early supply shortage to a relaxed state. Industry players are obviously bearish on the market outlook, and there is still a downward risk in market prices.
Although, price reduction promotions by polyester factories have led to a recovery in polyester production and sales, boosting market sentiment. Recently, the downstream weaving market has also ushered in a period of intensive resumption of work, and the trading situation is expected to pick up slightly.
However, in the later stage, overseas public health incidents continue to ferment, crude oil stocks are expected to continue to decline, and PTA and ethylene glycol are relatively slow to increase due to polyester and terminal weaving loads. Next week may be dominated by weak shocks. On the supply side, in order to control the inventory of finished products, polyester filament factories will slow down their load increase. However, there is no substantial improvement in domestic demand at this time, and new orders from weaving factories are limited. In terms of foreign trade, the public health incident has caused certain uncertainty in foreign trade demand in the later period, and there is no obvious benefit on the demand side. Therefore, it is expected that polyester filament factories will still adopt preferential shipping and inventory reduction policies in the later period. </p
