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Is the polyester filament market worth looking forward to?

Update:05-08-2020
Summary:

Although the Sino-US trade friction is still a sharp sw […]

Although the Sino-US trade friction is still a sharp sword hanging over the downstream market, the downstream rigid demand is slowly improving, and the upstream raw material PTA and ethylene glycol markets have recently shown signs of stabilization and rebound, waiting for the bad news in the polyester filament market to digest Exhausted, expect the market to re-establish a continuous upward channel

As the traditional peak season approaches, downstream demand will gradually recover. Is the next polyester filament market worth looking forward to?

Reasons for weak demand

The market price of polyester filament this year is far lower than the level of the same period last year, and industry profits have also shrunk overall. The main reason is the weak downstream demand.

On the one hand, Sino-US trade frictions continue to result in unsatisfactory foreign trade orders, and textile factories have to face more intense international competition.

On the other hand, since 2016, under the influence of environmental protection policies, many textile companies in Jiangsu and Zhejiang have successively moved to Anhui, northern Jiangsu and other regions to expand production and rebuild. In the second half of this year, the overseas production capacity was released one after another, which led to the rapid expansion of the total domestic textile production capacity. The supply pressure has increased sharply, the inventory of the textile factory industry has continued to rise, and the profit of the industry has dropped rapidly, so the enthusiasm of the textile factory is not high.

At the same time, the global economic downturn in 2019, the downward pressure on the domestic economy, and the downward pressure on domestic bulk commodities, the raw material PTA market has mostly maintained a volatile trend, and the cost side has weakened the driving role of the polyester filament market.

It is precisely because the industry environment is relatively empty that the market prices of polyester filaments that have experienced two and two backwards have easily reached a new low in two years. The polyester filament market in 2019 is not optimistic. At the beginning of August, the polyester filament market price approached a new low in the year, and the polyester filament market also ushered in the first increase in production and sales this month on the 7th, followed by another increase on August 14. Can the vitality of the polyester filament market in August gradually increase, and can the market price be slowly repaired to make a good start for the traditional peak season in September? Or, the following polyester filament market will continue to "the peak season is not "Fairer off-season" market?

How to interpret the market

Short term

The polyester filament market has limited room for rebound. Recently, the raw material PTA market has been operating within a narrow range and the cost is stable, and the PTA processing gap has decreased compared with the previous period. It is currently at 800-900 yuan/ton. Even if the market outlook continues to fluctuate in the market price of raw material PTA, the decline will be relatively limited. According to statistics, the current profit of the polyester filament industry is 400-700 yuan/ton, which is a relatively high level this year. After the production and sales of the polyester filament market continue to increase this week, the downstream concentrated purchase period may have to wait until the end of August. The production and sales of the polyester filament market may return to the light market. Therefore, the polyester filament factory inventory may still have a certain room for growth. Under the trend of continuous accumulation of inventory in the polyester filament industry, polyester filament factories may continue to sell at profit in the future, and the market rebound may be limited.
Medium and long term
Whether downstream demand can grow as scheduled will be the key to whether the polyester filament market can continue to rise. At present, the finished product inventory of downstream weaving factories has accumulated to around 43 days, which is close to the level of the same period in 2016. According to statistics, since May, the weaving factory inventory has been maintained at a high level of more than 40 days, and this year, regardless of the off-season or the peak season, the weaving factory inventory has not shown a significant downward trend. In addition, the weaving factory's capital is not abundant, and the market outlook Because of lack of confidence, weaving factories are not very motivated to receive new orders in the near future. However, the easing of Sino-US trade frictions and the depreciation of the renminbi benefit the export market. At present, new downstream foreign trade orders have increased. Coupled with the relief of high temperature weather, the operating rate of texturing and weaving factories continued to rebound slightly, and the variety of fabrics sold in autumn and winter increased, and the downstream domestic demand was also recovering in an orderly manner.

Overall view

Although the Sino-US trade friction is still a sharp sword hanging over the downstream market, the downstream rigid demand is slowly improving, and the upstream raw material PTA and ethylene glycol markets have recently shown signs of stabilization and rebound, waiting for the bad news in the polyester filament market to digest Exhausted, expect the market to re-establish a continuous upward channel.

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