The upstream began to act like a monster again two days ago. The President of the United States went to Saudi Arabia, and the final beneficiary was the polyester factory. The production and sales of polyester, which had been dormant for a long time, were very impressive for several days in a row. The market changes wildly, rising and falling overnight, which makes people confused.
So what changes have taken place in the market after this sharp rise after this plunge?
The destocking effect of polyester factories is obvious
Previously, due to the sluggish market conditions and the continuous decline in superimposed costs, the price of polyester yarns has also continued to decline. Under this situation, weaving companies have a strong wait-and-see attitude and focus on rigid demand purchases. The inventories of polyester factories have continued to accumulate. Some manufacturers have reported that polyester yarn prices have continued to decline. The inventory of ester has reached as much as two months, and even slightly better stocks have one month of inventory. Therefore, polyester factories were generally in a high inventory state before.
However, with the changes in the current market, many weaving companies believe that the price of polyester yarn has reached the bottom and can be purchased. Therefore, the production and sales of polyester factories have exceeded 100% for three consecutive days, and the highest one day reached about 300%, which means that nearly 50% of polyester yarn was sold. According to the statistics of Silkdu.com, the overall inventory of the polyester market is concentrated in 22-26 days. In terms of specific products, POY inventory is 22-28 days, and FDY inventory is around 17-24 days. , while DTY inventory is about 20-25 days. Some companies said that the inventory in the factory has been almost cleared. Even some specifications are out of stock, either on promotion and no one buys them, or they are outright bought out. The salesperson of a leading polyester company said to the editor: “I have a lot of short sales here, and some specifications have accepted short orders for 15 days. Now I won’t accept any empty orders.”
Polyester prices are boosted by many parties
After the polyester factory successfully destocked, the first thing it did was to raise the price. One of the reasons why the polyester factory did not dare to raise the price before was the high inventory. When the inventory was high, it tried its best to offer profit promotions and get rid of as much inventory as possible for the future. We are preparing for the market situation in half a year, but now this part of the pressure has been resolved, and not only has the inventory pressure been resolved, there are two other factors that have also directly increased the price of polyester yarn:
polyester load reduction
In late June and early July, some factories voluntarily reduced production in order to maintain prices, and the load of polyester factories is now less than 65%. As long as the polyester factory maintains this load now, polyester yarn prices will not drop too much no matter what. Although downstream demand is insufficient, the polyester factory itself has a low load and low inventory. It means maintaining stability until the peak season in the second half of the year. By then It doesn’t matter if the previously inspected device is restarted.
Cost support is obvious
In the past two days, crude oil prices have returned to the era of 100 US dollars/barrel. PTA has been boosted. The price of PTA delivered in September has increased by 300 yuan/ton in just a few days. In terms of spot prices, it was already about to fall into the 4-digit era. The internal price of PTA has now returned to 5,750 yuan/ton.
Boosted by various factors, the price of polyester yarn has been rising for four consecutive days. The current prices of 150D polyester yarn for mainstream products are: FDY: 8300 yuan/ton, POY: 7800 yuan/ton, DTY: 8900 yuan/ton. At the beginning of the week, prices rose by 225 yuan/ton, 200 yuan/ton, and 50 yuan/ton.
How is the market outlook going?
From the current point of view, the price increase of polyester yarn has not actually increased significantly, and although the destocking effect of polyester factories is obvious this time, because the downstream demand is not particularly good, this part of polyester inventory seems to have been removed, but in fact It has just been transferred to weaving companies, and now the upstream market conditions have been “blacklisted” by most textile people. You can buy as much as you want, so in the short term, polyester yarn will be boosted by costs. Prices will rebound, but in the medium to long term, downstream demand has not recovered, and polyester prices will inevitably decline.
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