Cost, supply and demand are the key factors affecting the price trend of polyester filament. By tracking the price trend of polyester filament since 2019, it is found that the demand factor in supply and demand is the primary factor affecting the price. In 18 months, due to Demand affects the rise and fall of prices, and cost factors affect the rise and fall in 7 months.
Figure 1 Distribution of reasons for the rise of polyester filament from 2019 to March 2021
Source: Longzhong Information
Taking the market in the first quarter of this year as an example, the price of polyester filament showed a linear upward trend from mid-February to March. The main driving force came from the cost side. The spot circulation of raw materials was tight before the Spring Festival, and the supply tightened after the holiday. Spot quotations continued to increase, and costs Under pressure, polyester filament quotations have continued to rise, and corporate cash flow has continued to improve. Under the guidance of rising buying sentiment in the early stage, downstream buyers actively replenished their positions, and the volume and price of polyester filament rose. As prices continued to rise in the later period, and many downstream companies had sufficient raw materials, resistance gradually heated up, and market transactions became increasingly deserted.
Figure 2 Price trend comparison of mainstream polyester filament models from 2019 to 2021:
Source: Longzhong Information
3 Since last month, as raw material prices have dropped and polymerization costs have dropped, polyester filament cash flow has reached its peak in recent years. However, downward price transmission has not been smooth. Overseas epidemics have not been effectively controlled. The impact of the epidemic on overseas demand is still large, while polyester filament yarns have not been effectively controlled. The price of polyester filament yarn has increased too fast, gray fabrics are unsaleable, and the resistance of downstream users to high prices has increased. However, polyester filament companies have not lowered prices, and the company has been operating stably. Therefore, the production and sales of polyester filament yarns have continued to be sluggish since mid-March. I don’t buy it. As shown in the figure below, the trading atmosphere in the polyester filament market is still deserted, and inventory pressure is slowly increasing.
Figure 3 Comparison of polyester filament production, sales and inventory trends in 2021:
Source: Longzhong Information
Inventory continues to accumulate In early April, polyester filament companies were under great pressure to ship, and the overall production and sales situation during the Tomb Sweeping Day holiday was not satisfactory. After the holiday, some quotations were raised in a narrow range, which further aggravated the market’s selling sentiment. The inventory of polyester filament companies was under pressure, and compared with The high inventory has reached the level of one and a half to two months, and the low inventory is more than 20 days. The influence of demand factors has gradually become prominent.
Due to the impact of sluggish demand, polyester filament companies are focusing on discount promotions near the middle of the month. At this time, downstream users have certain replenishment needs, and market production and sales are increasing. The highest production and sales in a single day are 1000%-1200%, and the average daily production and sales reach more than 500%. Because leading companies adjusted their prices earlier, production and sales increased rapidly after the market opened. However, other small and medium-sized enterprises adjusted their quotations later, and most downstream users had already stocked up, so the overall production and sales situation was not as good as expected. Later, some factories continued the preferential model, but the transaction situation was not good.
Currently, more downstream users are purchasing intensively than at the beginning of the week, and the inventory of raw materials is sufficient. In the short term, except for individual companies that have made small purchases, market production and sales are basically in a downturn. , the overall production and sales are expected to be around 20-50%. The inventory pressure of polyester filament companies has eased, and there is no risk of downward adjustment in the short term. Therefore, in mid-to-late April, the market is basically in a state of consolidation and consolidation. As corporate inventory pressure increases at the end of the month, the market still faces downside risks. Overall, supply and demand factors dominated the market in April.
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