Introduction: Recently, polyester filament yarn has been affected by the weak operation of the raw material end, and has maintained a trend of average shipments, flat production and sales, and weak operation. POY and FDY cash flows are hovering on the edge of the cost line. Affected by the reduction in production and burden during the Spring Festival, downstream weaving enterprises are not very enthusiastic about purchasing, and most of them are waiting and watching. It is expected that polyester yarn will maintain a volatile operation in the short term, and there may be a wave of centralized purchasing before the holiday. Promotional shipment? Losing money and cutting meat! Wait and see for price increase? Please keep an eye on inventory! Polyester factories are facing a dilemma and running at a stalemate.
PTA and ethylene glycol price trends in 2019
Raw material end:
In early December, international crude oil remained at a high level, which was good for the polyester raw material market. The raw material end of ethylene glycol was affected by the weather and the cargo arriving at the port was affected. Low inventories in East China’s main ports and relatively low construction starts have supported short-term prices. However, as cargoes arrive at the port, ethylene glycol inventories have accumulated. Inventories in East China have increased by 53,000 tons to 355,000 tons, plus coal. In the ethylene glycol production market, with the commissioning of Hengli Petrochemical and Inner Mongolia Rongxin, the ethylene glycol market price has begun to decline. PTA is affected by the strong price of raw material PX and the postponement of Hengli Dalian’s 2.5 million tons unit, as well as the negative effects of Xinjiang Zhongtai’s 1.2 million tons unit feeding, polyester’s successive reductions in January, and the overall operation is mainly volatile. Therefore, in general, the raw material end of polyester filament yarn is mainly weak.
Production, sales and inventory
Polyester filament shipments have gone uphill since October, and the one-day parade will still continue until the end of the year . With the start of construction, polyester factories such as Xinfengming, Tiansheng, and Tongkun began to undergo Spring Festival maintenance in December and gradually reduced their load. Polyester factories began to reduce their load one after another, because downstream weaving has entered the plan to stop production and reduce production. Polyester Inventories have further accumulated, and now POY inventories are mostly around 6-10 days; FDY inventories are mostly around 7-11 days, and some companies are in an oversold state; DTY inventories are mostly around 16-20 days, and some are higher than one month. .
Polyester filament enterprise inventory list in 2019
Downstream demand side
The demand at the end of the year is weak and it is difficult to take advantage of the benefits. The quotation of gray fabrics is chaotic. At the end of the year, weaving companies mainly refinance funds, and there are some cases of abandonment of orders. Downstream weaving companies are more cautious in stocking up. Weaving companies have started stocking up for the Spring Festival since last week. Most companies expect to stock up until about a week after the new year or even until the end of March. A new round of procurement plans after the new year is expected to start at the end of March and early April. At present, there is still a gap in the expected consumption of stocks before the year. The current operating rate of water-jet looms in Shengze area is 73.14%, down 5.92% from last week. The start-up situation is seriously divided. Most large factories with more than 1,000 looms have a start-up rate of around 80% to 90%. With the advent of the “returning season”, the lack of work has affected the start-up situation. It is expected that the start-up rate will drop significantly next week. Water-jet weaving enterprises The inventory of gray fabrics is high, with an average of 39.17 days, an increase of 1.52 days from last week. Most of them remain at 30-45 days, and some are as high as 90 days.
To sum up, with the new production of raw materials and the continuous reduction of burdens of downstream weaving enterprises and the Spring Festival, polyester factories can only limit production and protect prices, which is an inevitable trend for the development of polyester before the Spring Festival. Is the polyester factory promoting shipments? Losing money and cutting meat! Or wait and see about price increases? Let inventory increase slowly? This dilemma seems to be at the New Year’s Eve. After weighing the pros and cons, refinancing is more important. Therefore, the editor predicts that with the production limit of polyester factories early next month, polyester yarn may have a centralized profit-sharing promotion and shipment market.
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