On the occasion of the alternation of “gold, three, silver and four”, the raw materials are really “killing” like crazy.
On the evening of April 2, a number of oil-producing countries unexpectedly collectively announced that they would voluntarily implement a plan to reduce oil production, which will last from May to the end of 2023. The sudden joint production cuts have given a boost to the oil market, which has recently been depressed due to the banking crisis. At the opening of trading on April 3, Beijing time, the two main crude oil futures contracts, WTI and Brent, rose 7% at the opening, and Brent crude oil suddenly stood on the upper limit. US$85/barrel.
After Saudi Arabia and other major oil-producing countries announced voluntary production cuts, crude oil bull Goldman Sachs raised its forecast for the price of Brent crude oil at the end of 2023 to $95 and the price of Brent crude oil at the end of 2024 to $100.
Polyester yarn has risen for five consecutive years, but production and sales are flat
The price of crude oil has continued to rise, and the prices of PTA and PX have also increased significantly against the background of seasonal maintenance. These are all “eating” the profit margins of polyester yarns step by step. As a result, the price of polyester filament rose last week (March 27-30). Among them, FDY150D increased from 8150 yuan/ton to 8450 yuan/ton; POY150D increased from 7550 yuan/ton to 7850 yuan/ton; DTY price increased from 8950 yuan/ton to 9250 yuan/ton.
It is not difficult to see from the above table that although the daily price increase of polyester yarn remains at 50-100 yuan/ton, the intra-week increase brought by the “five consecutive increases” is as high as 300 yuan/ton, and the frequency of such price increases is short-term. Inside is also extremely rare.
After looking at price fluctuations, let’s focus on production and sales. Looking back at last week, the production and sales rates of polyester filament companies in the sample were 38.4%, 49.2%, 41.5%, 47.5% and 43.9%. It can be seen from the data that the daily average production and sales performance of about 40% is extremely average. Affected by this, polyester filament factory inventories are showing an upward trend.
Towards the end of March, downstream buyers originally had a strong willingness to buy at the bottom, but polyester prices continued to rise in a short period of time. Faced with high-priced raw materials, downstream companies were unwilling to pay for them, and resistance was growing. Against this background, the overall trading atmosphere in the polyester filament market is dull. Most downstream purchases are mainly for replenishment of urgent needs. In the past, purchasing forms such as “buying up but not buying down” and “hoarding large quantities of raw materials” have not appeared. Immediately, the beautiful vision of the polyester factory to boost production and sales with price increases came to nothing.
Shortage of some raw materials affects production
From market research, we found that the price fluctuation of raw materials has a great impact on weaving companies. Most companies are worried that the rise in raw materials will affect the profit margin of fabrics, and they are becoming more cautious in purchasing raw materials. For example, as mentioned above, polyester yarn has “increased for five consecutive days”. Only a few companies have expressed plans to stock up, and they have purchased approximately 15-20 days more. Most weaving companies still focus on rigid demand purchases. In their view, according to the current market performance, the later trend of raw material prices is not clear, and may be mainly stable with a small increase, so they dare not stock up on large quantities.
However, a while ago, some weaving companies lamented to the editor that they had encountered difficulties in production and operation. According to him, he was scolded by the customer this time. It was normal for three years of operation, but at this time this year, there was a shortage of raw materials. Since mid-March, there has been a serious shortage of 40D 7F nylon yarn in the factory. Some machines can only be left vacant, waiting for the raw materials to be loaded into the pot. On the one hand, the customer’s delivery deadline was met, and on the other hand, the gray fabric could not be produced. Later, he learned that 70D nylon yarn was also sold out, and some factories were working at full capacity to produce nylon, polyester and viscose dobby jacquards.
In terms of price, as of March 30, the price of nylon FDY (40D/7F fully matted, AA grade) of a company in Jiangsu was reported at 19,200 yuan/ton, an increase of 900 yuan/ton from the price at the beginning of the month (18,300 yuan/ton). The price range is amazing!
According to the analysis of this textile boss, the large-scale distribution of lightweight and sun-protective clothing may be an important reason for the shortage of related raw materials.
Postscript:
Against the backdrop of continuous contraction on the supply side and positive expectations on the demand side, supply and demand in the short-term crude oil market will tend to be tightly balanced, which has also provided strong support for the rebound in oil prices. On the demand side, the recovery is still less than expected. Under the extreme tension between the two sides, the subsequent trend of raw materials may become increasingly “confusing”…
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