6 Down! International Oil Prices Hit A New Low In 18 Years! Will The Turning Point Of Polyester Material Come?

In March 30th, the New York Mercantile Exchange delivered light crude oil futures in May, dropping below $20 a barrel, and the lowest price was $19.27 a barrel, the lowest level since 2002.

As of March 31st closing, the US WTI crude oil futures market prices rose, the main contract reported 20.09 yuan / barrel, or 0.39 U.S. dollars. Brent crude oil futures market prices fell, the main contract at 26.42 U.S. dollars / barrel, down 0.07 U.S. dollars.

Under the influence of the sharp drop in international oil prices, over the past month or so, polyester raw materials have seen an unprecedented decline.

In less than a month and a half, PTA fell 1250 yuan / ton, or over 20%; ethylene glycol dropped 1375 yuan / ton, or over 30%; polyester filament products also fell 2000 yuan / ton, or more than 20%.

The decline of more than 1000 yuan was carried out on the basis of low polyester products at the end of last year.

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The price drop of polyester products is mainly affected by international oil prices, and what is the decline of international oil prices?

The reasons are mainly composed of two factors: supply and demand:

Supply side, because OPEC led by Saudi Arabia and Russia led non OPEC crude oil producers can not reach a consensus on whether to reach a new crude oil production reduction agreement, several major oil producing countries choose to increase production and price war, thereby lowering crude oil prices. In addition, the oil exporting countries (OPEC) and non OPEC oil producers' production agreement expires at the end of March. Saudi Arabia said it would increase production to 12 million barrels per day, and the price war may continue.

Demand side, as the global new crown outbreak, industrial production and people's daily lives have been greatly affected, as the "industrial blood" crude oil demand has also been under tremendous pressure, Goldman Sachs Group said that the new crown pneumonia epidemic caused great impact on the oil industry, the world's oil demand this week will be reduced by 26 million barrels, accounting for about 25% of the total daily demand.

Under the double negative influence of demand and supply, international oil prices hit a new low of 18 years.

But just as the international oil price fell below 20 US dollars, Trump made a telephone call with Putin that the current oil price did not match the interests of the United States and Russia and brought some variables to the market.

In March, global investors experienced the most turbulent month in the history of stocks: 10 days, four fuses, 3 days, 20%, and by the end of 3, the number of confirmed cases of the new crown began to surge as the United States stepped up testing.

In order to deal with such a troubled time, President Trump made some remarks like "no one knows the virus better than I do", and did something similar to "unlimited quantitative easing (unlimited money printing").

These remarks and actions seem rather ineffective. After a month of observation, Xiaobian found that whether it is self proclaimed "knowing everything" or giving the stock market "forced blood", it has followed a logic: everything for the economy, everything for the general election.

The collapse of crude oil has caused a devastating blow to the shale oil industry in the United States, which is one of the reasons for the US stock market slump. Maybe when the US stocks fall sharply, oil prices will become a new brand that stimulates the stock market to rise.

The long-term low position of international oil price does not accord with the interests of the two big powers of the United States and Russia. Based on this point, Xiaobian personal judgment, even if the current crude oil market is still more bad, the future international oil price still has a big rebound possibility.

If crude oil prices rise, what will be the impact on the textile industry?

For polyester enterprises, the most troublesome problem at present is the problem of stock elimination.

Polyester stock in polyester plant has reached an unprecedented high level. According to the statistics of China's silk net, the overall stock market of polyester market is concentrated in 34-45 days. In terms of specific products, POY stocks are stored for 28-35 days, FDY stocks are close to 29-36 days, while DTY stocks are about 34-45 days.

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On the other hand, from the point of view of production and marketing, as the wait-and-see mentality of weaving enterprises is obvious, since the middle of March, the production and marketing of polyester factories have been maintained at almost 4 percent, and the stock of polyester has not been reduced.

If the price of polyester products is driven by the crude oil, it will have a positive effect on stock to a certain extent. However, under the pressure of high inventory, the rising trend will not continue.

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For weaving enterprises, although the continuous decline of polyester raw materials has also troubled a lot, but on the other hand, the contraction of foreign trade caused by the epidemic of foreign countries is the main contradiction at this stage.

According to an industry survey report in Keqiao, 78.4% of textile enterprises in the region indicated that orders were decreasing, and 64.8% of enterprises reflected that the existing orders were cancelled by customers.

Because of the reduction of orders and the increase of grey cloth inventory, many weaving enterprises decided to implement holiday and production reduction operations in the peak season of "golden three silver four". It is reported that a well-known enterprise will start off in April 1st. One cloth boss said that the capacity has been reduced to 1/3 recently. At the same time, a company with 300 looms also said that some machines would be shut down in the middle of next month.

And the measures to reduce production capacity of weaving enterprises are a serious pressure on the price of polyester products.

Editor's note:

The current low price of crude oil is due to the combined effect of the price war between the oil producing countries and the international epidemic. Once one of the factors is loose, crude oil may rebound. Judging from the current situation, there are such signs in the market.

But on the other hand, the epidemic is becoming more and more intense in the world, and foreign trade orders are not optimistic in the coming months. Weaving enterprises have tightened their production capacity and improved their ability to resist risks. Under such circumstances, polyester factories with large quantity of polyester stocks are in a very awkward position. Perhaps soon, when these undercurrents converge, it will create a new round of shuffling of the polyester industry.