Recently, leading polyester companies have once again launched low-price sales. Polyester filament factories have been promoting sales for two consecutive days. On the 22nd, polyester prices generally dropped by 200-500 yuan/ton, and on the 23rd they generally dropped by 100-650 yuan/ton. As the price of polyester filament has fallen sharply, the price of some products has dropped by nearly 2,000 yuan/ton compared with mid-October, almost reaching the lowest point since the power rationing policy soared.
The price of polyester yarn fell below a new low, which has led to the recent increase in production and sales. Among them, most of the promotional manufacturers have exceeded the 200% level, breaking the deadlock of continuous wait-and-see in the downstream, and the overall atmosphere has picked up.
The price of such “fragrant” polyester yarn has also given rise to a mentality among some weaving companies: buy more while the raw materials are cheap. You can always use them in the future anyway. The fabrics produced are all relatively conventional. If the raw materials fall in the future, they will definitely be affected. If the market is under control, the market will get better at the end of the year due to stockpiling, and by then the profits of fabrics made with cheap raw materials will become very high. Moreover, not only weaving companies think so, but traders also think so, and there are many who take the opportunity to stock up on raw materials and make price differences.
Calculated according to the market price, the current cash flow of polyester is indeed close to the profit and loss line. Although the market has not made substantial progress, the raw material side has picked up in recent days, which has caused a surge in enthusiasm for stockpiling downstream. So is the current market price “bottom”?
Short-term industry grouping to stabilize prices boosts
The medium to long term also depends on demand.
The editor believes that U.S. oil has made a strong comeback after falling below 80 US dollars per barrel recently, and the industry self-discipline alliance is speaking out to stabilize prices, which will have a certain boost to the market.
However, in the medium to long term, the recent trend of international oil prices and other raw materials is still not optimistic. At present, the overseas epidemic situation is becoming increasingly severe. Europe has already been closed down. In addition, the release of large amounts of crude oil reserves in the United States has suppressed oil prices. The market’s concerns about the demand side have begun to heat up.
Overall, the decline of the polyester industry in November can be seen as the energy and chemical sector’s follow-up to the cost collapse caused by the collapse of crude oil and coal prices. At the same time, there is also the negative impact of the intensified spread of overseas public health events.
Lack of good news for weaving market
Cost becomes the core driver of pricing in the polyester industry
So in order to explore the purchasing nodes and cycles of the polyester industry, we must start from two aspects. One is the recovery of the demand side, and the other is the stop of the cost side.
From the demand side, although the inventory of polyester factories is not very high, since late October, power cuts in Shandong, Henan, Jiangsu and other places have been fully relaxed or even canceled, and production capacity has been quickly restored and released. Some small and medium-sized enterprises have accumulated inventory. Rates continue to rise, and working capital is being squeezed. At the same time, as we enter the end of the year, textile companies have greater cash flow needs and need to pay for spare parts, water and electricity bills, wages, bonuses, loans and interest. Some companies have resorted to methods such as selling inventory and quickly realizing cash to maintain production. The desire for raw material procurement will become more cautious. Therefore, overall, the market currently lacks good news and does not have the favorable factors of favorable timing, location and people to prepare large quantities of goods.
Furthermore, there is no signal to stop the decline on the cost side, and the market stocking cycle has narrowed. It can be seen that the inflection point on the demand side of the polyester industry may rely on the inflection point on the cost side, resulting in the cost variable having a greater weight among the influencing factors of the polyester industry. As the crude oil market is currently facing multiple uncertainties, including the suppression of the release of crude oil reserves in the United States and the recurrence of overseas epidemics, short-term crude oil fluctuations are predicted to be frequent. For a long time to come this year, cost factors will be the core driver of pricing in the polyester industry.
This “bottom” or not “bottom”
Grinding may take longer
For downstream weaving companies, to a certain extent, there is nothing wrong with the idea of bargain hunting. Buying low and selling high is the essence of doing business, but accounts are often not calculated this way. Although the gray fabrics produced by weaving enterprises have a wider range of applications, judging from the short-term market situation, orders for Christmas, “Double Twelve” and other orders have been basically completed. At present, polyester terminal companies are producing to meet rigid needs, and the market lacks enthusiasm for stocking up. Especially under the background of tight funds at the end of the year, it is difficult for terminal orders to improve in the near future, so they can still be piled in warehouses as inventory, causing gray fabric inventories to increase. Come more and more. When the funds are occupied to a certain extent or the warehouse cannot be piled up, there are only two options left for weaving and trading companies – to stop production or sell goods. Therefore, stocking up on large quantities of goods at this stage may be risky. On the basis of the loss of foreign trade orders and the scarcity of domestic trade orders, the operating pressure of enterprises has increased sharply. This large-scale stocking operation has further increased the pressure on production and operation. Conflicts such as excessive production costs and tight corporate funds may become prominent.
As for traders,�, the large amount of stocking in the early stage did not reflect “preparing for a rainy day”, and the actual unit price in the later stage did not rise as expected. If a large amount of goods is stocked, in the short and medium term, we may once again face the risk of “price but no market”.
</p
