In the past week since December, there has been a sudden “heat wave” in production and sales, 200%, 180%, 150%… It seems to have injected “a hint of warmth” into the recent cold polyester market!
Who caused the ups and downs of the polyester market?
As far as polyester filament is concerned, the editor believes that the main driving force for the recent recovery in the market comes from the vigorous promotion and production reduction actions of polyester factories.
Judging from the current maintenance of the polyester market, starting from last week, the maintenance of polyester manufacturers will gradually increase. Recently, some manufacturers such as Yizheng Chemical Fiber and Ningbo Quandi have polyester filament, polyester The short fiber equipment has entered the maintenance stage. In the later period, especially from late December to January, polyester plants have large-scale maintenance plans, such as the Spring Festival parking maintenance plans for many polyester plants in Fujian Baihong, Fujian Jinxing, Xiamen Xianglu, Taicang Shenjiu, Taicang Changle, etc. has been introduced, by which time the start-up of the polyester industry will be significantly reduced, and the supply to the market will inevitably be weakened.
Since December, in just a few trading days, chemical fiber manufacturers have offered certain discounts from time to time, and they often negotiate discounts during actual transactions. This has boosted the polyester market to a certain extent, causing production and sales to exceed 100 for many days.
Another influencing factor comes from December 5, when OPEC will hold a meeting in Vienna, Austria, to discuss crude oil production cuts. At the close of trading on December 5, the price of WTI crude oil futures for delivery in January 2020 rose 4.15% to close at $58.43/barrel; the price of Brent crude oil futures for delivery in February 2020 rose 3.58% to close at $63 USD/barrel. On Friday night, Beijing time, OPEC+ officially announced that it would cut an additional 500,000 barrels per day in the first quarter of next year to help avoid oversupply and support oil prices in the first quarter of 2020.
After the news was announced, the two oil prices rose by more than 2%, and further continued their previous gains.
Crude oil is the most raw material for polyester products. Its fluctuations can easily cause price changes of various products in the polyester industry chain. The production reduction expectations conveyed by this round of OPEC meetings have boosted international oil prices and given the polyester market a shot in the arm.
Of course, it also comes from the urgent need for replenishment from the downstream. Since this year, the market has been operating with low inventory of raw materials. Now it has reached the point of a new round of urgent need for replenishment. According to the weaving market, , most weaving factories are already in low raw material inventory within 10 days. Coupled with the current stabilization of the market and the arrival of the new year, continued small-batch stockpiling has begun.
The weaving stocking situation at the end of the year may become an important driving force for the polyester market
As the end of the year approaches, stocking up has become the focus of everyone’s attention. Since this year, overcapacity has affected the weak trend of polyester yarn. Downstream weaving companies are also keeping a close eye on the price of polyester yarn. Everyone is curious about how the downstream weaving companies may respond to this situation before the holiday. ? What is the current mentality of weaving companies?
For weaving enterprises, raw material prices account for the vast majority of product costs and are one of the most important factors affecting gray fabric prices and profits. Therefore, textile workers will be extremely sensitive to changes in raw material prices. The current views of weaving companies on polyester yarns, and generally speaking, the recent situation in the polyester yarn market is not clear.
1. The three-year low price has made some weaving factories excited: after the beginning of the new year, there will be hundreds of thousands of profits!
Since the beginning of this year, the market price of polyester filament has continued to run at a low level, especially in the recent period. The price of conventional raw materials has not only been the lowest this year, but also the lowest price in the past three years. . Such low prices, as well as varying degrees of transaction discounts, make many weaving bosses excited.
“Buy it. With the current price of raw materials, we must take advantage of the opportunity to buy at the bottom. Our machines in the factory are now fully operational, and we have a firm need for conventional raw materials. We just happen to take advantage of the low price now.” , it won’t hurt to prepare more raw materials.” Mr. Xu, the weaving boss with nearly 300 looms, said excitedly, and even calculated an account with the editor.
If the current price of FDY 150D is 7,000 yuan per ton, if the price rises to 7,500 yuan per ton after the year, in fact this is only the price around October this year. This price is not high at all, and the increase is only At 500 yuan/ton, but calculated based on 500 tons of raw materials, it is equal to a profit of 250,000 yuan.
In fact, there are many weaving bosses like Mr. Xu in the market recently who all have the same idea. On the one hand, the price of raw materials is indeed at a historical low; on the other hand, in the face of profit losses, polyester manufacturers will inevitably find ways to control inventory to stabilize prices or increase prices, and it is impossible to keep falling.
If you take advantage of the low price of raw materials now and boldly buy hundreds of tons of raw materials at the bottom, if the price of raw materials increases in the future, you will not only make money for raw materials; after the beginning of the new year, you will use it to produce orders after the price increase. We also made money from the production of gray cloth, which is a real profit.
2. No money or courage to purchase raw materials! Isn’t the lesson learned from buying hundreds of thousands last year not enough?��
Manager Chen, who has been running a weaving factory in Shengze for more than ten years, talked about the stocking up of raw materials very depressedly. The textile market was relatively good in the past two years, and conventional fabrics were generally sold well. With sufficient supply and expectations for the price of raw materials after the new year, Manager Chen decisively stocked up on raw materials for more than a month before the Spring Festival last year.
Unexpectedly, not long after the beginning of the new year, the originally expected increase in raw material prices not only did not appear, but the price actually fell. So many raw materials purchased in the early stage were inadvertently lost. Hundreds of thousands. Coupled with the slow sales of conventional fabrics this year, both volume and price have dropped, which is even worse for Manager Chen. Therefore, even though the price of raw materials is currently at a low level for the year, Manager Chen said that there will be absolutely no stockpiling of raw materials before the Spring Festival this year. The factory plans to suspend production and take a holiday after New Year’s Day. This month, most of the purchases will be on-demand and can be used as needed, as long as normal production can be guaranteed.
There are many weaving bosses like Manager Chen who are not planning to purchase raw materials in large quantities before the Spring Festival. Some of them may have been hurt by hoarding like Manager Chen; some textile bosses believe that it was not easy for polyester manufacturers to reduce inventory years ago, and they will still face inventory pressure after the holidays, so prices will naturally be difficult to significantly increase. If there is room for growth, there may still be price reductions and promotions. Of course, there are also some weaving bosses who are really helpless and have a backlog of gray fabric inventories, which has led to poor capital flow and no money or courage to purchase raw materials.
The polyester market is expected to rise after the Spring Festival, but it may be limited
Every year on the eve of the Spring Festival, downstream weaving mills will more or less purchase raw materials to replenish their positions after funds are withdrawn, which is what the industry calls “preparing for the New Year.” In addition to being used to produce some actual orders, these stocks also reflect managers’ expectations for the market after the year. Some people also joked that this was a deliberate stockpiling of goods in the factory by the owner of the textile factory to calm people’s hearts and reassure the workers that they would still have work to do next year. Personally, I think this is not unreasonable. After all, for factories now, the biggest headache for bosses is not the high cost of manpower, but the instability of manpower.
From a traditional perspective, the textile industry will have a decent stocking up tradition in the early Spring Festival. The price change data of polyester filament from 2015 to the present seems to verify this trend. That is to say, after the Chinese New Year every year, the price of polyester yarn will rise.
However, after experiencing the impact of the extreme polyester market this year, the price of raw materials has plummeted, coupled with the expected macroeconomic situation The downward adjustment and the back-and-forth Sino-US trade friction have caused most midstream and downstream manufacturers to have a relatively pessimistic attitude towards the market in the coming year. Stocking less goods before the holiday, starting work later after the holiday, and taking holidays early are the general expectations of weaving factories for this Spring Festival.
At the same time, there are variables in the upstream raw materials. In addition, polyester companies’ inventories are also at high levels due to the start of production and early demand, which may have a greater impact on the later period. Therefore, from a fundamental point of view, the demand for the polyester market after the year will be quarterly. Coming, but may be limited. </p
