High Inventory, Slow Digestion, Future Polyester Raw Material Prices Remain Bearish.

Recently, as weaving enterprises resumed production and resumed production, the demand for overdue holiday time continued to release, and some fabrics even appeared to rise in price.

At present, the loom start rate in Shengze has been restored to 70%, and the printing and dyeing capacity has been restored to 50%. With the gradual control of the epidemic and the quickening pace of workers resuming work, the rate of opening up will increase more rapidly in the future.

In March 3rd, the production and sales of polyester filament Market in Jiangsu and Zhejiang provinces were greatly improved. The average production and sales of the mainstream factories were 80%-150%, and some of the better factories were able to produce and sell 200-300%.

But even if production and sales are rising due to the rise in oil prices, the textile industry is still judging the future of polyester raw materials.

Last week, Xiaobian once carried out a survey on textile enterprises' judgement of the future price of raw materials and the strategy of weaving enterprises to purchase raw materials. Nearly 200 textile people participated in the survey.

When asked about the price trend of raw materials, 10% of the textile people thought that the price of raw materials would rise. 80% of the textile people felt that the price of raw materials would drop, and 10% of the textile people would feel stable.

When asked about purchasing raw materials strategy, only 7% of textile people chose to hoard goods at this time, 26% of textile people chose to wait and see, while 67% of textile people chose to buy with them.

When asked about the trend of future raw materials, when academician Zhong Nanshan predicted that China could basically control the epidemic situation at the end of April, only 39% of the textile people believed that the raw materials would rebound, but 46% of the textile people felt that they would not rebound.

It can be seen that most textile people have no confidence in the polyester market. This lack of confidence is most directly derived from the performance of the polyester Market in recent stages.

Last week, international oil prices rarely fell sharply due to the spread of foreign epidemics.

The New York Mercantile Exchange delivered light crude oil futures in April, which closed at $44.76 a barrel in February 28th, a cumulative decline of 16% a week. The April London crude oil futures price of London closed at $50.52 a barrel in February 28th, and a 14% decline in a week, the lowest price since July 2017. Brent Futures Co.

Under the influence of international oil prices, last week, all products on the polyester industry chain also fell across the board.

During the week from February 24th to February 28th, ethylene glycol dropped 115 yuan / ton, PTA fell 200 yuan / ton, polyester FDY 150D dropped 200 yuan / ton, POY 150D fell 375 yuan / ton, DTY 150D fell 150 yuan / ton.

In the past, when the crude oil fell, the polyester Market tended to "go its own way", and this time, "keeping up with the trend" is still mainly affected by the fundamentals.

Global spread of the epidemic

Since late February, the focus of epidemic growth has shifted from China to foreign countries. In recent years, new confirmed cases of new crown pneumonia have been discovered in countries such as South Korea, Italy, Japan, Iran, Singapore and the United States.

Countries such as South Korea and Italy have taken measures to seal the city and encourage them to work at home because of the serious development of the epidemic.

The continuous spread of the epidemic has a great probability that it will affect the next foreign trade market, which will cause some hidden troubles for weaving and then affect the polyester market.

High inventory and slow digestion

Compared with the hidden worries in weaving, the most direct reason for the price reduction of polyester products is the excessive inventory in polyester factories.

According to the statistics of China's silk net, the overall stock market of polyester market is concentrated in 32-42 days. In terms of specific products, POY stocks are stored for 26-32 days, FDY stocks are close to 27-33 days, while DTY stocks are about 33-42 days.

In terms of inventory, recently, polyester has not been done as satisfactory as expected. Although weaving enterprises have resumed work in succession, this has not led to the improvement of polyester production and marketing. Last week, the production and marketing of polyester factories basically remained near 2-3 per cent, and production and sales slightly improved this week, and production and sales exceeded 100 in March 3rd. However, such a high production and marketing is due to the rebound of crude oil, and how long it will last is still to be discussed. For today's stock close to 40 days, it can only be a drop in the bucket.

From the above research questions, cloth bosses are also looking at the raw materials and buying more people. So in the long run, it is very difficult to get rid of the inventory of polyester filament.

Polyester Market in the future or further shuffle

At present, there is a very obvious polarization in the polyester market. The top six polyester filament enterprises in the industry, such as Tong Kun, Xin Feng Ming, Sheng Hong, Heng Yi, Heng Li and Rong Sheng, account for more than half of the total capacity. The industry concentration degree is increasing at a steady speed every year.

Chemical fiber leading enterprises began to open up the whole industrial chain, and some small and medium-sized chemical fiber enterprises were old because of the old machine equipment. There was a gap between cost and quality in the products and factories.

Although the profit of polyester filament still exists from now on, under the condition of low production and marketing, the price can only be regarded as "having no market price".

In the absence of short-term inventory, the demand for cash flow is higher. Those leading enterprises have sufficient funds and have the ability to resist such shocks. But what about those small and medium sized chemical fiber enterprises with tight capital chain?

Therefore, Xiaobian estimates that the reshuffle of polyester industry will accelerate in the short term. After the outbreak, the agglomeration degree of the industry will increase to a higher level in a short time.

afterword

At the beginning of this week, stocks and international oil prices began to rebound. But for polyester products, there was no significant change in fundamentals, although cloth boss would buy some raw materials in a short period of time, but there was no substantive help for polyester stock. Cloth boss does not buy it, polyester raw material price will still be the next mainstream.