International oil prices continued to rise during the holidays. With cost support, polyester filament yarn had a good start after the holiday. Enterprise quotations were gradually raised. However, within the next three days, the polyester market adjusted prices for the second time. On the 7th, polyester filament prices generally rose by 100-200 yuan. Yuan/ton, and then rose again by 50-100 yuan/ton on the 8th.
However, it was found through data that on the first day after the holiday, downstream users were worried about the increase in procurement costs and moderately replenished their positions. The overall production and sales during the day were 50-60%, and the highest production and sales were more than 100%. However, the market has been in a stalemate since the 7th, and downstream users’ resistance to high prices has increased. Some transactions have been above flat, and the production and sales ratio of most companies has fallen back to less than 30%.
The fluctuations in raw material prices have always touched the heartstrings of textile people. For textile companies that have not prepared enough raw materials before the holiday, the intensive increase in the beginning of the year is extremely worrying. For textile people who are accustomed to buying up and not down, this time Why is it difficult to see much improvement in production and sales?
Weaving recovery period
Resistance to high prices in the downstream has heated up, and filament yarns have lacked motivation to continue rising.
On the one hand, as oil prices continue to rise in the early stage, the United States has loosened its sanctions on Iran. In order to curb the current high oil prices, releasing Iranian crude oil has become an important way to suppress crude oil prices. Oil prices have fallen by more than 2% since the 8th from a nearly seven-year high, which has led to downward adjustments in futures prices such as PTA and MEG. As overnight crude oil and polymer raw materials were lowered, cost support weakened, and polyester filament manufacturers lacked motivation to continue to rise, so many stabilized the market and waited.
On the other hand, most downstream weaving companies plan to resume work and production in the middle of the month. Currently, only a small number of companies are operating, and most companies are waiting for employees to return to work. The weaving operating rate is expected to be on track by the end of February, and many weaving manufacturers have stocked up before the holiday. Therefore, Post-holiday purchasing enthusiasm is not high, depending on the price of raw materials. However, the resistance of downstream users to high prices has increased, and the production and sales of polyester filament have dropped significantly.
International oil prices continue to rise during the holidays. With cost support, polyester filament has had a good start after the holiday. Enterprise quotations have been gradually raised. However, downstream users are worried about the increase in procurement costs and have moderately replenished their positions. The overall production and sales within the day are 50-60%, and the higher production and sales are above 100%. . However, with the correction of oil prices and the weakening of cost-side support, polyester filament manufacturers are mostly holding steady and waiting, the market is running in a stalemate, and downstream users’ resistance to high prices has increased. Some transactions have been above flat, and the production and sales ratio of most companies has fallen back to less than 30%. The reason is that many downstream weaving companies plan to resume work and production in the middle of the month. Currently, only a small number of companies are operating, and most companies are waiting for employees to return to work. The weaving operating rate is expected to be on track by the end of February, and many weaving manufacturers have stocked up before the holiday. Therefore, Post-holiday purchasing enthusiasm is not high, depending on the price of raw materials.
Schedule for suspension and resumption of operations during the Spring Festival holiday for weaving enterprises in major domestic regions
Comparison of comprehensive start-up rates of water jet and chemical fiber weaving from 2021 to 2022
Specifically, most downstream textile companies resume work around the eighth day of the first lunar month to the fifteenth day of the first lunar month. Earlier companies were scheduled to resume work on the eighth day of the first lunar month. As of February 8, the comprehensive start-up rate of chemical fiber weaving in Jiangsu and Zhejiang was 30.25%. An increase of 8.74% from before the holiday. Currently, some companies that opened on the eighth day of the first lunar month have not fully put into production. The main reason is that many migrant workers are not fully in place, and most workers are still at home and have not returned.
Some downstream textile companies said that there are currently few new orders, and the first day of startup after the holiday is basically to produce and deliver pre-holiday orders. There are also companies that have not received new orders and choose to start the machine in advance in order to stabilize their workforce. Upstream textile raw materials are off to a good start in the current year. Some downstream customers are more enthusiastic about purchasing than before the holiday, and raw material quotations have increased slightly. However, downstream users mostly stocked up on goods before the New Year and did not consider purchasing goods in the near future. Orders were not transmitted to users after the start of the New Year. Only orders received before the New Year were mainly in low quantities, so there are currently no stocking plans and arrangements.
Poor production and sales, limited price increases
Filament FDY has suffered losses again
It is understood that the maintenance of polyester equipment around the Spring Festival this year is not very intensive. The current average operating rate is around 83%, and some equipment is still being restarted. Due to the recent mismatch in upstream and downstream production, polyester manufacturers have rapidly accumulated inventories. Filament inventories are 5-7 days higher on average than before the Spring Festival, and will continue to rise in the short term. Against the background of poor production and sales, polyester factories have limited efforts to raise prices, and filament cash flow has shrunk significantly, with FDY having lost money again.
Domestic polyester filament installation maintenance list before and after the Spring Festival in 2022 (unit: 10,000 tons/year)
According to the resumption time of previous years, the centralized resumption of production of terminal weaving enterprises will not occur until after the fifteenth day of the first lunar month. Before the Spring Festival, the number of days for downstream stocking is not high, and the industry has low inventory. As the inventory of raw materials is consumed, the willingness of enterprises to purchase will gradually increase. However, whether the upstream raw materials can continue to be strong is critical to the smooth transmission of prices to the downstream. From the current point of view, there may be a certain demand for replenishment when work resumes after the holidays, which will boost the demand for polyester and be beneficial.Digestion of polyester stocks.
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