Recently, the geopolitical crisis has resurfaced, international oil prices have violently risen again, and domestic polyester raw materials have also ended their half-month price decline. The rise in oil prices has led the prices of PTA and ethylene glycol to enter an upward channel.
At the same time, with the price of polyester raw materials rising, polyester yarn prices are showing signs of rising again. A new round of market conditions has arrived, so can this round of market conditions continue?
Geopolitical crises continue:
Iraq was attacked by rockets, Saudi Aramco’s oil facilities were attacked Attack
On the evening of April 14, local time, an explosion occurred at the international airport in Erbil, the capital of the Kurdish Autonomous Region in northern Iraq, and the U.S. Consulate near the area sounded the alarm. The Kurdish autonomous government’s counterterrorism department said the explosion was caused by at least one rocket attack.
There are US troops stationed in the military zone of Erbil Airport. There is currently no specific information on casualties and property damage.
On the other hand, following the 12th, the Houthi armed forces in Yemen launched 17 drones into Saudi Arabia, targeting the oil of Saudi Aramco in Jubail and Jeddah. After the attack on the facilities, on the morning of the 15th, a spokesman for the Houthi armed forces said that they once again used drones and 11 missiles in Jizan to attack Saudi Aramco’s oil facilities.
The “Big Three” came together to help, and crude oil rose by more than 5%
The three energy giants OPEC (OPEC), International Energy Agency (IEA), and U.S. Energy Information Administration (EIA) have released three oil market reports, showing that crude oil demand will rebound while inventories are declining. , international oil prices once rose by more than 5% on Wednesday.
EIA announced on Wednesday that U.S. crude oil inventories dropped sharply by 5.89 million barrels in the week to April 9, far exceeding the expected decrease of 2.7 million barrels and falling for three consecutive weeks. To reduce by 3.52 million barrels, East Coast crude oil inventories hit a new low in more than 30 years.
In its latest monthly report on Wednesday, the IEA raised its forecast for global crude oil demand growth this year by 230,000 barrels per day, predicting that global oil demand and supply will rebalance in the second half of the year. Global producers An additional 2 million barrels per day of production may be needed to meet expected demand.
In addition, OPEC also raised its global oil demand forecast on Tuesday, predicting that oil demand will increase by 5.95 million barrels per day in 2021, an increase of 70,000 barrels per day from last month. Rising demand has provided support for OPEC’s production increase. Even if OPEC+ gradually increases production by more than 2 million barrels per day in the next three months, oil inventories are expected to still fall.
Affected by this, international oil prices have been greatly boosted. As of the close on April 14, the settlement price of May WTI increased by 2.97 to US$63.15 per barrel, an increase of 4.9%. Brent in June rose 2.91 to US$66.58 per barrel, an increase of 4.6%.
The international political situation is turbulent, and the polyester industry reacts violently
Geopolitics is a very important factor affecting international oil prices. After two Saudi oil facilities were bombed on September 14, 2019, the price of Brent crude oil futures soared by 20% in one day. The Gulf War and the Iraq War also caused international oil prices to rise sharply for a period of time. Crude oil is the raw material for polyester products, and its price changes directly affect the cost and price of polyester products. Regardless of the subsequent development of this geopolitical conflict, judging from the current situation alone, with the demand for crude oil and geopolitics are frequent, and polyester raw materials have been deeply affected by them.
As crude oil rises, commodities in the entire energy and chemical sector rise. For example, downstream products of crude oil such as PTA and ethylene glycol. Boosted by the surge in crude oil, PTA futures stopped falling and rebounded on the evening of the 14th, and quickly rose after the opening on the 15th, standing at 4,600 points. Also as a raw material for polyester, the market price of ethylene glycol has also risen due to the boost of crude oil. At the opening of trading on the 15th, the main contract of ethylene glycol futures on the Dalian Commodity Exchange rose to above 5,000 points.
Driven by international oil prices, on April 15, the price of polyester filament stopped falling and rebounded, and various polyester products generally increased by 50 -200 yuan/ton.
After March, the situation of polyester filament is similar to that of PTA, and both appear to be relatively weak. However, unlike PTA, the current inventory of PTA is very high and the production capacity is increasing rapidly, while the inventory of polyester filament is not very high. The peak season in the first half of the year has passed nearly halfway. The raw material inventory of downstream weaving companies has been exhausted and they are in urgent need of stocking up. Polyester companies need to destock. Although the polyester giants are highly centralized and have always maintained the awareness of raising prices, the only problem is the price of polyester filament. Because of crude oil factors, it has been difficult to achieve a good price increase. The entire polyester market can be described as “everything is ready, except for the price of oil.”
For polyester companies, even if international oil prices fluctuate again in the future, as long as they do not fall sharply, there is not much room for the price of polyester filament to fall in the future. The current price stabilization strategy of polyester companies is difficult to change in the peak season of the first half of the year. At the same time, downstream companies also have the habit of buying up prices rather than buying down prices. The giants are preparing for later expectations.The rising inventory is a headache, and it is unlikely that prices will be lowered to suppress market enthusiasm.
On the other hand, the weaving operating rate began to weaken this week after going sideways in the previous stage. The inventory of gray fabrics is still high. The trading volume in Jiangsu and Zhejiang markets is far lower than the level of the same period last year. There are signs of weakness again. Mainly due to the re-emergence of the overseas epidemic, resulting in terminal caution, and the reverse flow of orders from Southeast Asia. Until there is a clear turning point in foreign trade orders, it is difficult to say that demand will improve.
Can the rise in international oil prices “save” the sluggish polyester industry? Can the weaving market, which has been dragged down by raw materials, rebound? Please wait and see. </p
