Short fiber prices weakened at the end of February, and futures prices fluctuated all the way down. At the end of March, they had fallen below 6,900 yuan/ton. This was mainly due to the weakening of raw materials, pressure from futures merchants to sell goods, and the suspension of purchases by downstream companies. Short fiber production and sales Cooling down, negative feedback from the industrial chain has caused prices to continue to fall. Overall, the good situation of short fiber supply and demand has not yet been reversed. High production and low inventory can still be maintained. Prices are still relatively flexible, but they require the cooperation of orders. At present, industry profits continue to be compressed, and the disk processing difference has dropped to a low level, which has long value.
Supply and demand maintain a good situation
Stop fiber is the one with a better supply and demand pattern among the three varieties already on the market in the polyester industry chain. , upstream PTA and MEG are both at the peak of capacity expansion, and prices are under pressure. The staple fiber industry plans to put into production nearly 2.7 million tons from the end of 2020 to 2021, accounting for more than 30% of the production capacity base at the end of 2020. However, the planned new production capacity is concentrated in varieties with fast growing demand, such as hollow and spunlace staple fibers. Cotton staple fiber production capacity is growing slowly, which will put little pressure on short fiber futures prices for the time being.
Relevant data show that short fiber began to operate at almost full capacity in the fourth quarter of last year, and the factory has maintained a state of understocked sales, which shows that its supply and demand pattern is still good. Under this preferred supply and demand pattern, short fiber prices are highly elastic, and this price elasticity is closely related to the procurement rhythm of downstream companies. When downstream companies increase purchases, short fiber prices will take the initiative to rise, and when downstream companies reduce stocking, short fiber prices will stop rising and fall.
Before and after the Spring Festival, most downstream weaving companies carried out large-scale stocking. According to survey data, some stocks are less than one month long, and many are more than two months old. There are even companies that still have two months of raw material stocking, which shows that the last round of speculative stocking was relatively large. Therefore, since the end of February, the production and sales of short fiber have been poor. Weaving companies have mainly focused on digesting inventory, and the price of short fiber has continued to fall. Theoretically, at the end of March, the raw material inventories of some companies with low stocks have dropped to low levels, and there is a new round of demand for stocking. However, while the sharp fluctuations in international crude oil prices have led to cautious downstream procurement, international clothing brands have stopped using Xinjiang cotton. , short fiber prices once accelerated their decline. As an important textile raw material blended with cotton (14765, -35.00, -0.24%), short fiber has an important substitute for cotton, but this incident more reflects the market’s future trade situation that may affect the export orders of China’s textile and apparel market worries.
The disc processing gap has dropped to a low level
This week, the price of short fiber has accelerated its weakening, and industry profits have continued to decline. It has now dropped to the same level as the same period in previous years. At a low level, the disc processing difference has dropped to the lowest level since its listing. However, judging from the profit level, there is not much room for continued decline. There is an expectation of stabilization and recovery, but it requires the cooperation of downstream procurement.
In the short term, due to the low inventory level of ethylene glycol, prices are firm, and the centralized maintenance of PTA equipment also provides certain support for prices, so the cost of short fiber is relatively strong. However, judging from the supply and demand pattern of the market outlook, ethylene glycol supply will gradually increase in April, mainly due to the restart of Yangzhou Coal Pingding 200,000 tons production capacity, Xinjiang Tianye 200,000 tons, Binzhou Petrochemical 300,000 tons, and Shaanxi Yanchang Petroleum 100,000 tons. tons of new production capacity, two large refining and chemical supporting facilities of Satellite Petrochemical and Zhejiang Petrochemical will be supplied from April to May. Hubei Sanning’s 600,000-ton unit will be commissioned in April, and Henan Energy’s 200,000-ton old unit in Puyang will also be put into operation. It restarted in early April. In addition to the restart of overseas units in the United States, South Korea’s Lotte Daesan No. 1 300,000-ton unit has also restarted. Both domestic and foreign supply are expected to grow. Therefore, ethylene glycol stocks will reach an inflection point in April, and prices will weaken accordingly. After the centralized maintenance of PTA in March and April, the supply of old equipment was restored in May, and a new equipment was put into production. Prices are also expected to weaken again. Therefore, weakening raw materials may also bring opportunities for profit improvement in short fiber.
Based on the above analysis, the recent trend of short fiber prices has been weak. The main reason is that downstream weaving companies have carried out a large amount of raw material stocking before and after the Spring Festival. In the past month, they have mainly digested inventory. host. In addition, the lack of terminal orders and market concerns about the trade situation have also inhibited the enthusiasm of enterprises to replenish stocks. Short fiber production and sales continued to be weak and prices fell.
However, from a time perspective, companies that have less stock in the early stage have exhausted their raw materials, and will gradually encounter demand for replenishment after the end of March; from a profit level perspective, short fiber profits have dropped to At a low level, there is not much room for continued squeeze. Time and space are available, but with the expectation that raw material prices will continue to fall, companies will not blindly buy the bottom, but choose to buy as they go until raw material prices bottom out and rebound. Therefore, the time for the price of short fiber to stop falling may be delayed than expected, but in the later period, the price of raw materials will weaken again, and the poor processing of short fiber may be passively repaired. You can consider making long short fiber profits on dips. </p
