Recently, Polyester Manufacturers Are Quietly Increasing Prices! How Long Can The "Big Silk" And "Dacron" Return To The Downstream?

In recent years, polyester manufacturers began to have a "small action", constantly trying to pull up the price of polyester.

A polyester fiber factory in Hangzhou rose by 50-100 yuan;

Shaoxing a factory FDY price increase 50 yuan;

The price of polyester filament in No.1 Factory of Wujiang was raised by 50 yuan / ton;

The price of polyester yarn in Xiaoshan No.1 Factory increased by 50-100 yuan / ton

　　……

So far, the prices of polyester filament products have increased to varying degrees compared with last week, especially for FDY and POY products.

What are the causes of this phenomenon?

1. High concentration of polyester production capacity, high price of large factories

At present, the domestic polyester industry chain is in the stage of expansion and integration, especially large-scale polyester enterprises in the industry, such as Tongkun, Rongsheng, Hengli, Hengyi, Shenghong, Sanfangxiang and xinfengming, are still increasing or acquiring polyester production capacity, and extending their industrial chain to the upstream raw material industry. With the improvement of industry concentration, the chemical fiber leading enterprises occupying the head resources undoubtedly have more advantages. Therefore, they have a stronger and stronger voice on polyester price. If big factories want to support the price of polyester, the price of polyester will naturally rise.

2. PTA, ethylene glycol prices go up, polyester fiber get cost support

In recent years, the US shale oil industry bankruptcy wave has partially offset the market's worries about oversupply. The oil market is supported by favorable factors, and it is expected that the international crude oil price will still have an upward trend in the short term. Under the strength of crude oil, the overall cost driving force of petrochemical industry continues to be strong. Affected by this, both PTA and ethylene glycol prices have rebounded, especially for ethylene glycol. Due to the recent slowdown in the growth rate of goods arriving at the port, although the shipment is average, the slow growth of inventory at the main port has supported the higher price of ethylene glycol. Although the price of PTA rose slowly, it was better than that in the early stage. Therefore, the end cost price went up and stabilized, which provided an effective support for the price of polyester filament.

3. Production and sales recovered, polyester inventory growth slowed down

In recent years, the production and sales of polyester filament have recovered compared with the previous period. The average production and sales of mainstream manufacturers are maintained at around 60-80%, and the products also show differentiation. Some manufacturers can even produce and sell more than 100%. In the early stage, the production and sales of mainstream polyester manufacturers have been hovering around 50%. Although the production and sales are only slightly better now, even if the production and sales are just a little better in the case of high polyester production, it can also slow down the growth of polyester inventory, and then support the price of polyester.

Now, polyester prices tend to go up, but it is not the first time that prices have gone up and fallen. Moreover, in the form of superimposed textile traditional off-season in the post epidemic era, polyester will face more severe challenges than before. If the price wants to continue to rise, it is still relatively difficult.

1. Polyester production is expected to be put into production in the second half of the year, and the production capacity will be expanded again

In terms of supply, according to statistics, in the second half of 2020, there are still seven new units planned to be put into operation in China's direct spinning polyester filament industry, all of which are the capacity expansion of mainstream large factories, with a total production capacity of about 2.4 million tons / year, including Hengyi group of 1 million tons / year, xinfengming group of 300000 tons / year, Tongkun group of 500000 tons / year, Hengli Group of 600000 tons / year. Under optimistic expectations, it is expected that by the end of 2020, the total production capacity will reach 2.4 million tons / year, Domestic direct spinning polyester filament production capacity will exceed 34 million tons / year.

Polyester filament supply side to expand, no doubt to its price formed a significant pressure, if production and sales are difficult to reach a flat, the price may fall into the channel of decline.

"High pressure weaving" 2

As we all know, the price of polyester is very low now. Even though it has risen a little recently, it is still at the historical low level. There is no demand, and it is all in vain.

With the weaving market gradually entering the off-season, and high inventory has become a common problem, loom start-up rate is only reduced, the demand for raw material polyester filament is gradually weakening, polyester production and sales continue to be depressed, manufacturers' preferential promotion is frequent, but weaving enterprises are difficult to continue to pay, resulting in the continuous accumulation of polyester yarn inventory. For the downstream weaving manufacturers this year, the market is weak and the gray fabric inventory is high, which leads to the increase of capital pressure of most manufacturers. Therefore, weaving manufacturers are more cautious in the issue of raw materials hoarding.

3. Clothing enterprises have experienced the cold winter and lack of demand power

Under the impact of the epidemic, domestic and foreign clothing brands have been affected. Some stores are going bankrupt, and some of them have to close down in the global fashion industry. According to the official data of China Garment Industry Association, from January to may 2020, the retail sales of clothing goods of units above the quota in China totaled 288.7 billion yuan, a year-on-year decrease of 25.6%, and online retail sales of wearing goods decreased by 6.8%.

The future of terminal garment enterprises is worrying, and the demand for fabrics will be reduced even more. Back to the upstream, grey cloth and polyester yarn are also affected.

afterword

It is a normal reaction for polyester prices to pick up a little after the continuous decline. However, if we want to say that it can continue to rise, whether from the perspective of its own fundamentals, downstream weaving or terminal clothing demand, it seems that they are more than capable. In the short term after the market, the price of polyester filament bottom shocks probability is larger.