The situation in Russia and Ukraine is uneven, and the market will continue to be volatile.
Last week (February 24), due to the sudden tension between Russia and Ukraine, energy prices soared, breaking through the 100-yuan mark, directly driving up the prices of downstream chemical products, and the market was booming.
With the negotiations between Russia and Ukraine, the intervention of some countries in the war, and the end of the Winter Olympics, domestic equipment has been put into production and resumed production, and the market situation has quietly changed. According to monitoring, a total of 43 of the 107 chemical commodities are in a downward trend, accounting for nearly 40%.
Energy prices hit 100 last week, stimulating the rise of various chemical products. Recently, the chemical market has experienced a sharp decline. What are the influencing factors?
With the end of the Winter Olympics, more domestic companies have resumed work and production, and production projects are gradually advancing to replenish inventories. In addition, due to the increase in war and mutual sanctions between many countries, international transportation has been blocked, terminal demand has been significantly reduced, and the overall market is in a downturn.
Although crude oil has entered the 100-yuan channel, only the news has supported energy-related industrial chains such as PTA. Moreover, the situation in Russia and Ukraine has changed rapidly recently. If the war or peace talks ends, energy prices will have greater room to fall, and it will be difficult for crude oil to rise. To make up for the supply and demand gap between upstream and downstream, most raw materials are more affected by demand than crude oil, so the current market is mainly “bearish”.
Polyester still promotes sales after losses
Downstream operations always maintain a sense of crisis
Judging from the current polyester market, as crude oil exceeded 100, polyester yarn suffered losses due to cost impact. According to common sense, prices will be raised simultaneously to cope with the cost impact. However, on the 28th, polyester factories still started promotions. The reason is that problems with downstream demand have led to poor sales of polyester and an increase in inventory.
It is understood that in fact, polyester filament has been on sale for many days since mid-February. The reason for the promotion at that time was obvious, and polyester stock had reached a high point. After about half a month of promotion, although the production and sales of polyester yarn have increased, the inventory has not been alleviated. A sense of crisis arises in polyester factories. At present, the tactics that polyester companies can deal with are still more conventional methods such as “price reduction promotion”.
From the perspective of the downstream weaving market, downstream enthusiasm for purchasing polyester yarn has always been low. In recent years, geopolitical conflicts have continued and the future world situation is unclear, which will have an unpredictable impact on the industry. Furthermore, the epidemic is still continuing and market demand has been shrinking. There is always a big test for terminal demand. Although today’s polyester prices are not at the highest point, they are still at a high level, while the price of gray fabrics has always been at a low level. It can be said that the gray fabrics of weaving companies are sold at a guaranteed cost. Therefore, changes in the price of raw materials will directly affect profits, so manufacturers should be cautious. Within reason.
Be wary of speculation supported by news
Beware of crude oil collapse and retracement
Geopolitical conflicts have been escalating recently, and Russia and Ukraine are still in a state of emergency tension. Many countries have adopted currency sanctions, leading to confusion in cross-border transaction exchange rates. In addition, international transportation is blocked, and the problem of high international freight prices has not yet been resolved. Various difficulties have made overseas trade “prohibitive”. It is expected that the market demand may decrease in the short term due to geopolitics.
In addition, China continues to increase its efforts to ensure prices and stabilize supply to suppress speculation. It is expected that under the support of high crude oil prices in March, the industrial chain will still have room for upward growth. However, due to foreign tensions and domestic “stable” supply operations, most products may operate at a weak level. Everyone should be wary of speculation in chemical products due to news support, and beware of crude oil collapse and retracement, causing a substantial downturn in the industrial chain.
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