I thought that entering June, the polyester market would gradually weaken. However, recently, the supply of multiple specifications of nylon and polyester filament FDY has been tight, causing many market participants to bluntly say that the performance of the polyester market is a bit “unbelievable” again.
Monitoring data from China Silk City Network shows that the overall polyester market from May to now has shown a trend of increasing sales, with the average monthly production and sales of polyester filament at 100%-110%.
In fact, the “unpredictable” performance of the polyester market has occurred frequently in the past half a year, and the market has been constantly evolving between “unexpected” and “expected”.
“Since October last year, driven by upstream raw materials, the fabric market has made waves. The price of polyester filament has risen sharply, and weaving manufacturers in the peak season have stocked up a lot of goods.” Wu Xiaofen, an analyst at China Silk City Network, told the Futures Daily reporter that until the Spring Festival this year, The inventory of polyester manufacturers has been at a low level, and some specifications are even out of stock. The market can be described as “hot”.
When the market expected that after the Spring Festival, the polyester filament market would continue the “bull market” of the previous year, but it encountered a “late spring cold” market.
“The upstream raw material ethylene glycol has fallen sharply, and downstream weaving manufacturers have overstocked and are not active in purchasing goods, resulting in the continued decline of polyester prices.” Wu Xiaofen believes that in the first half of this year, the polyester filament market did not see a large-scale peak season market. After experiencing the crazy rise last year, the downstream weaving market is more cautious in stocking this year. Even if the peak season lasts for a long time, most manufacturers still take goods based on the price.
It is understood that compared with previous years, the peak season of the polyester market lasted longer this year. As of early June, the fabric market transactions were still stable. The supply of imitation silk, polyester taffeta, imitation memory and other products was tight, and some specifications were even hard to find. situation. , During the investigation, the reporter learned that the sales of some niche fabric products continue to be booming, and many fabric manufacturers have to queue up even to get the goods in cash. For example, the output of monofilament is small and it is difficult to meet customer demand. New orders have to be queued for at least 20 days to a month.
At this time in previous years, the off-season atmosphere was already strong, but at present, the operating rates of various cluster markets have not declined significantly. It is understood that as of early June, the operating rate of weaving manufacturers remained at around 80%. Inventory is low, profits are good, and manufacturers are highly motivated to produce.
As for the current polyester market’s lingering heat at the end of the peak season, Yide Futures analyst Zheng Youfei explained that on the one hand, the polyester segment was the first to enter the era of overcapacity reduction, and the growth rate of production capacity in recent years has been relatively low. , while upstream PX is in the production capacity launch period, and PTA has existing production capacity to resume production, so that upstream profits are transferred to downstream, and high profits lead to high operating rates; on the other hand, terminal orders are normal, although there are not many bright spots, but Just need to be optimistic.
During the investigation, the reporter from Futures Daily also learned that environmental protection regulations in the fabric market this year also played a certain guiding role. The reduction of production capacity and the conversion of manufacturers have led to optimistic prices for some old products.
“Compared with previous years, environmental protection efforts have been intensified this year. On the basis of strict control over the printing and dyeing industry, the control of terminal weaving wastewater emissions has been strengthened. The elimination and transformation of backward production capacity have made the supply of individual specifications of polyester in short supply.” Zhuo Chuang Information analyst Gao Shuai said.
However, in Wu Xiaofen’s view, Jiaxing, Keqiao, and Wujiang have successively launched environmental protection rectification actions for water-jet looms this year, involving more than 100,000 water-jet looms. Although there will be no centralized elimination in the short term, the gradual clearing of production capacity will inevitably depend on demand. The problem of oversupply of polyester filament will inevitably intensify in the future.
At present, the tight supply of some specifications has enhanced the confidence of industry insiders. Zheng Youfei believes that although the current polyester market is “not slow in off-season”, its sustainability requires close attention. “Whether this round of market conditions is caused by the mismatch between speculative replenishment and traditional procurement rhythms, or whether it is driven by improved terminal demand, we can roughly deduce from the macro and financial aspects, combined with previous research.” In his view, After the “off-season is not weak” market ends, with the completion of downstream replenishment and speculation replenishment, polyester inventory will accumulate again. By then, the market will turn weak, and the time window is July.
However, Gao Shuai believes that there are many uncertain factors in whether the market can perform “not weak in off-season”. “Currently, only certain specifications of products are in tight supply, and good production and sales data do not last long. Overall, terminal inventory pressure still exists.”
In addition, there are expectations for a downward adjustment in the operating rate of the polyester market. A polyester plant in Ningbo with a production capacity of 250,000 tons/year is scheduled to be shut down on June 13 for about 10 days for maintenance; two polyester plants in Shaoxing with a combined production capacity of 400,000 tons/year are planned to be shut down on June 20 for maintenance. About a month. In Gao Shuai’s view, market changes need to be viewed rationally, and the problem of “not slow in the off-season” should not be grasped and overestimated later market trends.
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