Recently, Polyester Manufacturers Are Quietly Increasing Prices. How Long Can Polyester Filament "Fly" This Time?

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

A factory in Hangzhou polyester rose 50-100 yuan / ton;

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

Since the bankruptcy, the oil market is still partly offset by the positive sentiment of the oil market in the near future. 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 polyester production and sales are slightly improved, polyester production and sales are only slightly better under the situation of high production and sales.  

Compared with the high price trend of polyester yarn, the price of polyester fiber will continue to rise before and after the epidemic, but the trend of higher price will not be the first time in the era of low price rise.

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

According to the statistics, the production capacity of Xinyi Group and Tongyi group is expected to reach 0.4 million tons / year by the end of 2020 The production capacity of direct spinning polyester filament will exceed 34 million tons / year.

It is possible that the price of polyester fiber will be significantly lower if the price falls.

2. Weaving "low start-up and high inventory" depresses the enthusiasm of silk purchasing

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, the loom start-up rate only drops, the demand for raw material polyester filament is gradually weakening, the production and sales of polyester filament continue to be depressed, and manufacturers' preferential promotion is frequent, but weaving enterprises are difficult to continue to pay the bill, 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 brands are facing bankruptcy, and some have to close many stores around the world. The global clothing industry is experiencing a cold winter and is facing industrial reshuffle. 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.