Introduction: Polyester yarn experienced a “tenth consecutive rise” on October 12. The rising price momentum was comparable to the strong trend of rising prices on one day at the beginning of the year, and even exceeded it. Nothing less. We can see from the picture that the price of polyester yarn has exceeded the price of polyester yarn at the beginning of the year when it soared. As shown in Figure 1, the prices of three conventional specifications of polyester reached their highest this year on the 12th. The prices were 150D FDY 8,850 yuan/ton, 150D POY 8,700 yuan/ton, and 150D DTY 10,300 yuan/ton.
Figure 1. Price trend chart of various polyester filament products
Polyester filament Will prices lose cost support?
On October 12, the price of upstream PTA plummeted by 115 yuan/ton in one day, falling to 5,430 yuan/ton, a decrease of 2.07%. It is understood that PTA units will gradually restart in mid-to-late October, PTA production capacity will increase, and international crude oil production capacity will also recover. PTA prices may lose the advantages of reduced costs and production capacity. In the medium to long term, PTA prices will fluctuate and weaken. However, in the short term, PTA prices will remain high and volatile in recent days due to the surge in cost-end crude oil.
Comparing Figure 1 and Figure 2, we can see that the price of polyester yarn increased almost at the same time as the price of PTA. Starting from the next day when the price of PTA increased, the price of polyester yarn also began to rise continuously, so it is not ugly. At present, the price of polyester yarn is mainly affected by the cost side. Once the price of PTA drops, polyester yarn will follow closely.
Figure 2. PTA price chart
Polyester inventory fell, profits increased significantly
After the National Day, the impact of “dual control” weakened, but the load of polyester factories did not see a significant increase. Instead, the load of polyester factories dropped again and again. From the figure 3 It can be seen that the load of polyester factories has continued to decline since September and currently remains at around 70%, and the load reduction effect is also very obvious. As shown in Figure 4, the polyester yarn inventory of polyester factories has dropped significantly. Nowadays, the overall inventory of the polyester market is concentrated at 15-24 days; in terms of specific products, POY inventory is around 11-19 days, FDY inventory is around 14-15 days, and DTY inventory is around 16-23 days.
With the increase in polyester prices and the release of inventory, the profits of polyester factories have declined. To repair, as can be seen from Figure 4, as of yesterday, the profit of conventional 150D FDY was 522 yuan/ton, the profit of 150D POY was 822 yuan/ton, and the profit of 150D DTY was 672 yuan/ton.
Figure 3. Polyester factory load trend chart
Figure 4. Polyester profit trend chart
Weaving demand is sluggish
Although the “dual control” measures have been relaxed, the market demand is sluggish. The traditional peak season of “Golden Nine and Silver Ten” is not satisfactory. The operating rate of water jet looms in Jiangsu and Zhejiang has increased, but the overall operation rate is still at a low level, with the operating rate at 58 About %, among them, firstly, considering that the power restriction measures have not been completely lifted, it is difficult to significantly increase the startup rate; secondly, the order advancement is insufficient. Although there are small batch orders, the sustainability is still limited.
According to market research, the current “double limit” measures in weaving factories are still in place. The shutdown mode is four on and off on two, and delivery is generally delayed within 2-3 days. In addition, foreign trade orders have not yet started to be placed, and domestic and foreign trade demand are sluggish. The concentrated replenishment of positions is only dominated by the “buy up” mentality, and at the same time, the resistance at the downstream weaving end has begun to heat up.
Taken together, polyester factories have indeed taken advantage of the downstream textile companies’ mentality of “buying up, not buying down” by limiting production and raising prices, and have saved profits that were stuck in the quagmire. At present, the demand side is not the main influence on the price of polyester filament. The key lies in the rise of the cost side and the fall of inventory. The cost-side price continues to rise and is already at a high level, which puts polyester factories in a passive situation, and the price of polyester filament follows suit. However, if the international oil price falls due to the recovery of crude oil production in the future, and PTA falls due to the impact of the cost side, polyester prices will eventually be affected in the medium to long term.
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