On March 1, affected by the escalation of tensions between Russia and Ukraine, international oil prices surged sharply. The main contracts of WTI crude oil and Brent crude oil both exceeded the $100/barrel mark, setting a new high since 2014. WTI crude oil once rose by more than 11% during the session. . As of the close, the NYMEX WTI crude oil futures April contract rose 8.0% to US$103.41/barrel; the ICE Brent crude oil May contract rose 7.1% to US$104.97/barrel.
Spandex and viscose are the first to increase in price
May trigger a rise in the chemical fiber industry chain
On the morning of the 1st, many spandex factories such as Huahai Spandex, Schulz Spandex, and Taihe New Materials issued emergency price increase notices in the morning, raising their quotations for 35-40D spandex by 2,000 yuan/ton.
At almost the same time, Yibin Siliya, Jilin Chemical Fiber, Xinxiang Bailu, Hubei Jinhuan and other viscose factories collectively raised prices. All varieties of their viscose filaments increased by 1,000 yuan/ton, which will be implemented from now on!
And industry insiders said that the fundamental reason for the collective price increase of spandex is the strong cost pressure from leading upstream companies. Recently, Wanhua Chemical announced that starting from March 2022, the listing price of Wanhua Chemical Group Co., Ltd.’s polymerized MDI in China will be 22,800 yuan. / ton (no change compared with February); the listing price of pure MDI is 26,800 yuan/ton (an increase of 3,000 yuan/ton from the price in February). In just 3 months, polymer MDI rose from 22,500 yuan/ton in January to 26,800 yuan/ton, with a cumulative increase of 4,300 yuan/ton! Among them, the increase in March was the most obvious, more than double that in February! As the world’s largest MDI giant, Wanhua Chemical’s price increase is bound to have a huge impact on the midstream and downstream industry chains, raising costs and compressing profits. The factory was forced to raise prices to save its life!
Viscose products have also quietly joined the ranks of price increases. As previously reported, the tense situation in Ukraine and Russia, the severe epidemic, high crude oil prices, and skyrocketing natural gas have all turned into “thunders” in the trend of chemical products, driving the rise of chemical products fiercely. The price increase of viscose is announced at this moment. Regardless of whether you are a product in the crude oil industry chain or whether it is directly affected by geopolitical conflicts and force majeure, it will not affect the market’s “pot of porridge” price increase trend at all.
The price increase of raw materials is never “reasonable”
Polyester products will eventually be driven by costs
According to incomplete statistics, in the past month, more than 60 kinds of chemical raw materials have been soaring. It has become normal for prices to rise by 10,000 yuan per ton, with the highest increase being 145,000 yuan/ton. The escalation of geopolitical conflicts is naturally one of the reasons for “detonating” the industrial chain. As the situation in Eastern Europe heats up, natural gas and electricity prices soar again. Crude oil soars to an eight-year high, driving up prices of kinetic energy products. Anxiety about the energy crisis is also growing. Most of these are upstream raw materials for bulk textile raw materials, which are bound to affect the trend of industry chain varieties in the future.
Looking back to the recent trend of polyester raw materials, PTA and ethylene glycol have fluctuated violently, especially the recent trend of polyester filament in the midstream has stagnated. The current operating load of polyester is at a high level. Due to poor terminal demand, the Inventories rise. As of February 24, polyester filament FDY inventory was 30.5 days, an increase of 19 days compared with the same period last year, an increase of 165.22%; polyester filament DTY inventory was 31.5 days, an increase of 12.5 days compared with the same period last year, an increase of 65.79%; polyester long Silk POY inventory is 27.2 days, an increase of 18.2 days compared with the same period last year, a rate of 202.22%. Polyester inventories are high, and companies are facing greater pressure to destock. A polyester industry chain with hot top and cold bottom has been formed. However, for polyester companies in the middle and lower reaches, the price increase of raw materials has never been “reasonable”. Whether it is the increase in raw material costs, labor costs, freight, miscellaneous fees, labor costs and other operating costs, they will all become the following. The heavy burden will continue to squeeze the profits of chemical fiber people.
At present, oil prices are at an all-time high, and the price difference with the middle and lower reaches has been widening again and again. After this, the mentality of terminals will also change, and they will gradually accept higher prices; energy and chemical products at the far end of the industrial chain will eventually be pushed up by costs. I believe that in the future Under repeated pressure from the cost side, this stagflation situation will soon change!
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