As terminal consumption in the polyester industry enters the traditional peak season, orders for autumn and winter have begun to be placed. However, polyester factories began to do the opposite at the end of last month and accelerated the frequency of promotions. Starting from August 28, polyester factories started promotions again. The average production and sales of polyester filament reached 300% that day, and the production and sales of some better factories could reach 300%. 500%, which can be said to be the best day for production and sales since August. Then production and sales increased again on the 30th and 2nd respectively, with the average production and sales exceeding 300%, triggering market speculation about the market.
For polyester filament, generally speaking, September and October are the traditional peak seasons, but they are also closely related to the performance of upstream raw material product prices. In early September, polyester yarns saw a decline as polyester raw materials weakened, which led to a decline in polyester products such as polyester filament. However, after the Mid-Autumn Festival, when crude oil broke the key support level, the polyester industry chain ushered in a decline. It also rose sharply, and the spot price and market still showed strong support. PTA can be said to be very popular, with the highest point during the day reaching 4%. It has been an exciting rise for a long time. Looking at the performance of another polyester raw material, MEG, it is also remarkable.
In an environment where both polyester raw materials and downstream demand are improving, with the promotion of products by polyester filament factories, it is expected that the acceptance of raw materials by downstream factories will gradually recover in the near future, and this is the purchasing node for downstream weaving companies. The arrival will inevitably attract downstream purchases of raw materials, which may further stimulate the recovery of orders in the downstream market.
It is the improvement in the market of upstream raw material products that has changed the decadent situation of continuous decline in polyester filament, causing the market situation to show some improvement, thus gaining a chance to breathe. So does the emergence of this market situation mean that the passive situation of polyester filament market is about to be reversed and changed? The editor believes that the probability of this happening in the market is still small. The main reasons for making this judgment are as follows:
There is huge pressure to put into production in the fourth quarter
It is unlikely that the polyester raw material market will reverse
Many analysts currently point out that it is not easy for international oil prices to resume their bull market pattern. The main reasons given by these analysts include slowing global economic growth, falling global demand, inflationary pressure, and the Russia-Ukraine conflict. International prices may remain low, waiting for the overall stabilization of financial markets. In this case, the stimulating effect of international oil prices on polyester raw materials will be greatly reduced, and the possibility of a reversal of polyester raw materials will be greatly reduced. Therefore, the window for polyester filament to obtain major benefits has not been fully opened.
At the same time, from the perspective of PTA supply, the pattern of near strength and far weakness, strong supply and weak demand has not changed, which is mainly reflected in the continuous widening of the 9-1 contract price difference since August. On the one hand, PTA equipment undergoes frequent maintenance and heavy losses. From July to August, PTA maintenance losses remained high. The increase in maintenance of major manufacturers and the purchase of spot goods by suppliers will have a short-term boost to PTA prices. According to the currently announced maintenance plan, the maintenance volume in September is expected to be the same as in August. On the other hand, PX load is on the low side, import volume rebounds month-on-month, but it still takes time, and the short-term raw material tension is difficult to alleviate for the time being. As of September 2, PTA’s weekly load dropped to a low of 67.2%. PTA continues to destock under low operating conditions. As of September 2, PTA social inventory is 1.985 million tons, and polyester factory raw material inventory is about 4.9 days. The current inventory is at the mid-season level, and the inventory pressure is not great. At the end of August, suppliers started buying warehouse receipts, and the number of warehouse receipts has decreased significantly recently.
In the medium to long term, PTA faces greater inventory pressure. In the first half of this year, only 3.6 million tons were put into production, and due to the large-scale maintenance of PTA equipment, the growth rate of PTA output is smaller than the growth rate of production capacity, basically maintaining a tight balance. In the second half of the year, the main production of PTA will be concentrated in the fourth quarter, and the pressure on production expectations is highlighted. The pressure on the upstream raw material end is not beneficial to the polyester market.
Declining demand for overseas replenishment
Polyester factory inventory pressure remains
In fact, the downstream demand in the polyester market has been weak for a long time, and the operating rate continues to decline. A person in charge of a company engaged in the import and export trade of PTA, polyester and short fibers said that since July this year, with the advent of high temperature weather, the polyester off-season has continued to slow down production and sales. It is difficult to reduce factory inventories from high levels, and polyester factories have reduced their prices. Negative production cuts. Recently, the overall production and sales of polyester yarn in downstream Jiangsu and Zhejiang have increased, and the demand has shown an improvement trend. As the weather begins to turn cooler and power restrictions are further relaxed, the machine load of polyester factories is expected to gradually pick up.
Based on the early production cuts by major polyester manufacturers and the weakening of the raw material cost side, the current comprehensive load of polyester has rebounded from a low level, while high inventory levels have declined marginally, and factory profits have also been restored. However, the terminal weakness continues, and polyester load is difficult to rebound significantly. The current comprehensive load of polyester is around 84%. In terms of inventory, the polyester weighted inventory was 23.7 days, a slight decrease from the previous month. Polyester factory inventory pressure remains.
Judging from market sentiment, downstream demand has been weak for a long time, and the market has a strong willingness to improve. The key to solving the current predicament of polyester does lie in the improvement of terminal demand and the increase in orders for autumn and winter textile clothing. If there is no significant boost in terminal consumption, polyester terminals will�The situation of inventory and low operating capacity is difficult to be substantially improved. At present, terminal consumption has gradually entered the traditional peak season, and orders for autumn and winter have begun to be placed. The market has certain expectations for the recovery of end consumer demand. However, judging from the current global macro consumption background, overseas inflation has intensified, the Federal Reserve continues to raise interest rates, U.S. textile and clothing inventories have peaked, demand for replenishment has declined, and overseas orders are expected to be lower than those in the first half of the year. ; Domestic orders are expected to be repaired but space is limited. Judging from this, domestic demand may be greater than exports as the driving force for terminal consumption in the second half of the year, but the overall expectations are not good.
All in all, it is difficult for upstream raw materials to perform beyond expectations, and downstream demand is weak, which has limited support for polyester filament. Although September has always been the peak season for the textile market, various textile markets currently show a very distinct characteristic of “not prosperous in the peak season”. For example, the weaving operation rate in Shaoxing is currently only maintained at about 70%, and a large number of small and medium-sized enterprises have inventories. The backlog is serious and it is difficult to recover funds; the operating rate of Shengze market is close to 70%. Like Shaoxing, many small and medium-sized enterprises also have large inventories, and the shortage of funds has become the biggest obstacle to enterprise reproduction. Imagine that when production encounters such a dilemma, it is logical that the demand for polyester filament from weaving companies will shrink. Even if there is a certain demand for replenishment from weaving companies before the National Day holiday, this is probably just a drop in the bucket and it is difficult to predict the market situation of polyester filament. form support.
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