In the past week, the price of polyester filament has been continuously falling, and there has been a significant off-season trend, affected by this, polyester factories have to offer big promotions again.
The polyester market is in a cyclical spell
At this stage, the polyester market is in a cyclical spell.
Because weaving enterprises wait and see, polyester production and sales are depressed; Due to the downturn in polyester production and sales, polyester inventory increased; Because polyester inventory increased, so some manufacturers cut prices; Because the inventory continues to accumulate, so the polyester factory promotion; Polyester factory promotion, weaving enterprises replenishment. This cycle ends and the next cycle begins.
The most direct reason for the continued decline in the price of polyester filament is the obvious lack of upstream and downstream support and the lack of market confidence.
PTA continues to weaken
Recently, the upstream PTA of polyester continues to weaken, and it is difficult to produce effective support for polyester.
On the supply side, the PTA device changed little, Yisheng new material 7.2 million tons of device reduced to 80%, on Thursday, Fuhaichuang 4.5 million tons of device is currently carrying a negative, PTA load of 81.4%. The load of a set of 3 million tons PTA plant in East China is steadily increasing, and the device maintains 50% load in the early stage. A set of 2.5 million tons of PTA plant in Shandong is currently being restarted, and the device is stopped for maintenance near 11.13. On the demand side, the polyester load decreased to 92.4%, down 0.3% from the previous quarter. The production and sales of Jiangsu and Zhejiang polyester are generally maintained, and the average production and sales are estimated to be about 5%. Jiangsu and Zhejiang terminal opening probability decline, terminal factory raw material inventory is still cautious. On the cost side, PTA processing fee is around 280 yuan/ton, PXN is adjusted to about 178 dollars/ton, crude oil is declining, PX shock is weak adjustment, and there is insufficient support.
Factory shutdowns have increased.
Downstream, the probability of a certain degree of decline.
Recently, from the market visits can be found, from clothing factories to weaving enterprises, the opening rate has been more obvious decline, stoppages are also increasing.
In today's market, weaving capacity has greatly exceeded the number of orders, and enterprises are often difficult to receive high-quality orders with short payment cycles and suitable profits. And the increase in the account period and the increase in risk, so that some enterprises only focus on serving old customers, but the number of orders that old customers can provide is limited, and this year the enterprise is in a large number of expansion.
When production capacity is idle, in order to maintain profit margins, many weaving enterprises choose to start high, excess production capacity to produce conventional products, and fast production and fast sales into the spot pool.
However, due to the longer and longer time for payment, the high start-up is very challenging the cash flow of weaving enterprises. When the equilibrium is broken, the probability decreases and the probability increases.
The imposition of tariffs creates lasting pressure
In the long run, the possible future tax increase will put a lot of pressure on textile enterprises, thus affecting market confidence.
In 2019, the United States imported about $500 billion of products from China in List 3 and List 4, involving about $40 billion of textile and apparel, although List 4B has not been implemented, but still has a greater impact on China's textile and apparel products exported to the United States, resulting in a significant decline in apparel products imported from China in 2019.
In the later stage, with the intensification of trade disputes, it will be further favorable to emerging textile and apparel destinations such as Southeast Asia and South Asia, and the textile and apparel exports of the above regions to the United States will further increase. However, the demand for textile raw materials in the region is bound to increase with the improvement of local finished product orders, which also brings new opportunities for the export of domestic textile raw materials. And with the shift of the main export areas of clothing, clothing exports to Russia, Central Asia, Africa and other places will also gradually increase, to a certain extent, replacing the share of exports to the United States.
(Information source: China Textile News)