During this special festival, the Dragon Boat Festival, a sudden “heat wave” of price increases injected “a touch of warmth” into the early cold polyester market! The rise in polyester prices has indeed had a certain effect on reducing inventory for polyester filament manufacturers; however, it has had little effect on the entire polyester industry chain.
Judging from the current maintenance of the polyester market, starting from this week, polyester manufacturers will gradually increase their maintenance.
In addition, in fact, a large part of the reason for this wave of good prices is due to the surge in PTA costs led by upstream PX. The good times did not last long. As domestic PX supply increased intensively, PXN gradually compressed this week. PX prices continued their downward trend. PTA lacked cost support and prices fell accordingly.
At present, PX is gradually giving up its previous gains, while the high-cost inventory and loss situation of downstream chip spinning has not changed. It seems that the polyester market will continue to be trapped in a correction “swamp”, but this is not the case.
Cost support still exists! The loss situation has not changed!
Polyester cost or performance resistant to falling
Although the negative news about crude oil fundamentals is still there, the conflict between Russia and Ukraine is still ongoing, the Iran nuclear agreement is slowly advancing, and the summer travel peak in the United States has begun in full, and fuel demand is improving. The above two factors still support the strength of crude oil. A strong promoter, it is expected that there will still be opportunities for international crude oil to rise, which will be transmitted to the downstream. PX will gradually stop falling, and PTA cost support will still exist. In addition, although some polyester factories are expected to undergo maintenance in June, there is no news of maintenance from major manufacturers. According to the release, if calculated according to the current PTA and polyester maintenance plan data, PTA will still be in a tight balance after mid-June, and there is no obvious negative side in PTA supply and demand. Therefore, polyester costs may be resistant to falling prices.
Stagflation in raw materials may lead to a short-term recovery in the downstream
But full recovery still needs to wait
From the perspective of the downstream textile market, most weaving factories still report that new orders are scarce, the market transaction atmosphere is deserted, and the inventory pressure of gray fabrics in the factory is high. In addition, the price of polyester yarn, the upstream textile raw material, continues to rise. Downstream profits are significantly compressed, and orders are particularly cautious. . The current stagflation in raw materials may bring about a short-term recovery of the market.
But at the same time, orders are currently relatively low, the operating rate of weaving factories continues to be low, the market has a strong wait-and-see sentiment, and the current market is still in a relatively difficult stage. Entering the high-temperature season, the market in the first half of this year has basically come to an end. Recently, due to the sharp increase in upstream textile raw materials, downstream users have reported that profits have been continuously compressed, resulting in order negotiations being particularly cautious. At present, due to the increase in upstream textile raw materials, the price of some seasonal regular fabrics has increased slightly. However, the inventory of finished products in the factory is high, coupled with the limited substantive orders. Under the influence of these two factors, the market transaction atmosphere is still weak. Most factories said that only A small number of new orders have been placed for autumn and winter. Autumn and winter orders have not yet been fully opened. Most factories maintain the lowest operating rate and maintain inventory. At present, domestic trade and European and American orders are showing slight signs of picking up, but full recovery still needs to wait.
Judging from the current fundamentals of polyester, PTA processing fees have risen sharply, and terminal demand has not improved. There is great resistance to continued upward movement. However, the conditions for a sharp decline are not yet met, and market prices will continue to fluctuate in the short term.
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