Good market conditions always come and go in a hurry. After the polyester filament market experienced a surge in the previous period and entered the traditional textile peak season of the Golden Nine and Silver Ten years, the market performance has been unsatisfactory, and the price increase was extremely short-lived. The trading road of polyester filament has been bumpy and bumpy; the downstream market is either obsessed with the hope of falling prices, or confused on the road to rising prices, and in the end most of them are stuck in the ups and downs.
Since October this year, the polyester market has borne the brunt of the long National Day and Mid-Autumn Festival. The purchasing enthusiasm of the downstream market has been obviously weak. It was not until the middle of the year that polyester filament started to increase prices. However, under pressure from all parties, mainstream polyester manufacturers have obviously lacked sustainability in price increases, with only sporadic room for upward adjustments of around 50-100 yuan/ton.
This reminds one of last October, when the market for polyester filaments was intensifying.
Looking back at the same period last year, there was a large-scale price increase boom in the polyester filament market. The quotations of mainstream manufacturers increased by leaps and bounds. The average daily increase was at the level of 50-100 yuan/ton, and production and sales exceeded 100 yuan. In addition to benefiting from high crude oil prices and the upstream polyester raw material market, the most important thing is that the downstream weaving market has a relatively rigid production demand for raw material procurement, and the increased enthusiasm for procurement has led to an overall recovery in the mainstream production and sales of polyester products. Of course, there is also strong support from the joint market meeting and the low inventory of polyester manufacturers.
But why does this year’s traditional peak season seem so dull?
The first factor to bear the brunt is naturally from the perspective of supply and demand. From the supply side, due to the impact of the G20, polyester manufacturers had more or less equipment shutdowns and maintenance last year. However, since the fourth quarter of last year, with the support of profits and demand, polyester manufacturers have almost no significant changes. A large-scale production shutdown for maintenance is expected to lead to investment in new production capacity.
On the demand side, the stocking mood in the weaving market was stimulated from time to time last year, and production and sales sometimes exploded. Especially in October, the overall production and sales of the polyester filament market generally reached 150%. Low inventory has always been a major factor in the rise in polyester filament prices. Last year, due to the boost in production and sales, the inventory levels of polyester factories were generally low, and some product specifications even experienced tight supply. However, judging from the recent production and sales of the polyester yarn market this year, it may be due to the early release of demand, or it may be due to the impact of high raw material prices. Entering the Golden Nine and Silver Ten seasons, the purchasing enthusiasm of the downstream weaving market has become more and more cautious. As a result, the inventory pressure of polyester manufacturers is gradually increasing.
Of course, the ups and downs of international oil prices in recent months and the weak market price of upstream polyester raw material PTA have obviously insufficient support for the cost of polyester filament.
Regarding the polyester filament market in the fourth quarter, the author believes that the potential for upward momentum may be relatively limited, and I do not expect to see a “crazy surge” like the market situation in the fourth quarter of 2016. Polyester manufacturers may need to: remain calm and watch the flowers bloom and fall in front of the court; stay and go without any intention, just follow the clouds in the sky.
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