Since November, polyester filament varieties have increased by nearly 500 yuan/ton on the basis of the sharp increase in October. The market is going crazy. We can learn from the past. Looking back on the market conditions of the past two years, polyester filament yarns have experienced sharp rises and then sharp falls. So how will the market perform this year?
Review of November market trends of the chemical fiber market in the past two years:
In November 2014, the entire textile market also set off a purchasing boom. Driven by the rise in futures and favorable factors such as equipment production reduction and supply reduction, the raw material PTA spot market prices rose strongly, and the price center continued to shift upward; in addition, The market price of raw material MEG is also on the rise. This series of phenomena has caused the polyester filament market to usher in an upsurge. The overall production and sales of the polyester market have improved, and prices have also risen accordingly. In just a few dozen days, the price of FDY products has increased by nearly 300 yuan/ton, and the price of DTY has increased by about 200 yuan/ton. The largest increase was for POY products, which increased by nearly 500 yuan/ton. In the next half month, the PTA market turned sharply downward, and polyester prices fell back. The prices of polyester products generally fell by more than a thousand yuan, and the prices of some products even fell below 10%, returning to before liberation overnight!
In the same period in November 2015, the same scene of sharp rise and fall also appeared again.
We can learn from the past. Will the market this year repeat the same mistakes as the previous two years?
Now, half of November has passed, the pace of growth in the chemical fiber market has slowed down, and signs of weakness have emerged: the skyrocketing PTA has seen a correction, while polyester filament is still rising willfully. Of course, there are financial attributes of PTA in the near future. However, polyester filament depends more on its fundamentals. In order to prevent chemical fiber companies from losing their minds due to the crazy rise and fall in profits, we have counted the unavoidable risks in the current crazy rise of the chemical fiber industry:
1. Futures turmoil triggered the collapse of upstream polyester raw material support
This round of rising prices for polyester filament yarns was caused by booming Double Eleven orders from downstream, and the reason for the surge was the surge in PTA and MEG futures last week. Now, upstream raw materials have given back their early gains, and the surge has The initial momentum is no longer there.
2. The end of the peak season in the weaving market: high-priced raw materials and low-profit production, it is better to take the holiday early to collect accounts
Due to the postponement of the peak season and the arrival of Double Eleven, the release of textile fabric orders has stimulated the increase in the load of looms, thereby driving the demand for polyester filament. Later, with the arrival of the end of the year, receivables and remittance issues have arisen. Funding difficulties caused by accounts receivable may slow down the purchase of raw materials by weaving companies in the later period. On the other hand, the Spring Festival this year is nearly 10 days earlier than last year. According to market research, due to efficiency reasons, some weaving companies currently say that instead of buying high-priced raw materials and producing at low profits, it is better to take the holiday early and collect accounts. Therefore, many have the intention to take a holiday after New Year’s Day. .
3. The one-sided hot market of polyester filament has not brought about a comprehensive change in the profitability of the industrial chain
Filament yarn profits have reached historical highs. Due to the demand blowout caused by textile orders, the profits of the PTA and MEG industrial chains have been significantly transferred to polyester filament. For many days in a row, the price and profit of polyester filament products have topped the list of chemical fibers. As of press time: the profits of all varieties of polyester filament have reached A record high. On the other hand, the upstream polyester raw materials are making little profit or even losing money! Such popularity has not brought about a comprehensive improvement in profitability. It is expected that polyester filament will not see a significant improvement, and supply and demand may cause trouble.
4. When the mentality calms down after the sharp drop, it may be difficult for inventories to remain low after production and sales drop
As the futures market experienced a sharp rise to a plunge last Friday, polyester filament production and sales suddenly cooled down. The average weekend production and sales were less than 50%, and production and sales fell sharply. However, the current operating rate of filament factories has not dropped significantly. , the recent low inventory of filament yarn has rebounded, and the effect of low inventory and price increase may be difficult to hold in the later period.
The recent terror of mad cows has taught PTA investors a vivid lesson. The plunge is the touchstone of fundamentals. It is rare for polyester filament to still have room to rise after the PTA plunge. However, do not be blindly optimistic and repeat the same mistakes. If it weren’t for the sharp drop in the market, the editor would even think that the bad market that has been depressed for nearly five years is finally coming to an end. However, while anticipating good times, please keep the chemical fiber manufacturers awake at all times.
