Recently, the price of polyester yarn has finally fallen. Although the decline is not significant, and the overall price is still at a high level, this is the first time in several months that the “big market” has turned green across the board.
When polyester prices finally drop, what is the raw material stocking situation of downstream fabric manufacturers? To this end, the editor went to the market for a visit.
In the past, the editor always thought that because of the Chinese people’s mentality of buying up and not down, when the price boom was booming in December last year, they must be desperate to buy polyester yarn, and there must be a lot of inventory.
However, the results of the visit surprised the editor.
In the interview, an anonymous cloth boss said that after last year’s surge in prices, their raw material stockpiles not only did not increase, but actually decreased compared to previous years.
This editor is very strange. We agreed to buy up and not down, but the inventory did not decrease but increased. Is it possible that what we experienced at the end of last year was a fake market?
So the boss explained to the editor that the reasons can be summarized as follows:
1. Such a large increase at the end of last year is obviously irrational. There is speculation behind it. They believe that the market will eventually return to rationality, but they cannot judge the time. “After a big rise, there must be a big fall.” This sentence still makes sense (when we are not talking about housing prices).
2. The main reason is that the price of polyester yarn was too expensive at the end of last year, and during the craziest period, the production and sales of polyester manufacturers exceeded 100% (more sold than produced every day), and the inventory was also very low, so It’s not that downstream weaving manufacturers don’t want to buy silk, but they simply can’t buy silk. Then, in the days before the Chinese New Year, the price of polyester silk didn’t change much, so downstream weaving manufacturers started to wait and see again.
3. The mentality of chasing the rise may bring profits, but more often it brings losses. You must know that those who end up losing the most money in the stock market are those retail investors chasing the rise. Nowadays, those who make textiles are all “veteran drivers” who have experienced many battles. They are all experienced, so they can basically maintain a calm mind when prices rise. After all, if you don’t buy the raw materials, you will make less money at most. If the raw materials fall after you buy them, you will lose money.
So how do downstream weaving manufacturers respond to this wave of decline in polyester prices?
The cloth boss who did not want to be named told the editor that he was waiting and watching when the price increased, and even more so when the price started to fall. After all, at this time, even the polyester manufacturers who were very tough some time ago began to sell at discount prices. Raw materials are available, and it can be seen that the current polyester market is in a situation of oversupply. Therefore, unless there is a hard demand for new orders during this period, they are not prepared to buy raw materials in large quantities.
When asked about the price of polyester yarn that has dropped to a reasonable level, they all said that it was around 9,000 yuan/ton, which was the price in November last year before the price increase began. It was relatively reasonable for polyester.
Now that MEG has plummeted, the price of PTA seems to have also been reduced, and the downstream demand is not as good as expected. The price of polyester filament does have reason and room to fall.
Postscript: For those “veteran operators” who have been working in the textile industry for more than ten years, they are accustomed to the sharp rise and fall of raw materials. Regardless of temporary gains and losses, keep a calm mind during the skyrocketing market and play steadily. Only by working step by step can you win step by step!
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