The Federal Reserve on Sunday lowered the federal funds rate range to 0-0.25% and launched a massive $700 billion quantitative easing program to protect the economy from the impact of the virus. Facing highly chaotic financial markets, the Federal Reserve cut banks’ emergency loan discount rate by 125 basis points to 0.25% and extended loan terms to 90 days. The Fed also cut reserve requirements for thousands of banks to zero.
After the news was announced, the global financial market did not buy into the Fed’s interest rate cut, but instead triggered a Further panic in global assets. On the evening of March 16, U.S. stocks opened sharply lower, triggering the third circuit breaker this month and the fourth circuit breaker in history. As of closing, the Dow Jones Industrial Average fell 12.93%, the Nasdaq fell 12.32%, and the S&P 500 fell 11.98%. U.S. WTI crude oil futures for April closed down $3.03, or 9.55%, at $28.7 per barrel, and once touched a level of $28.3 during the session. WTI April futures reached a four-year low. Brent crude oil May futures closed down $3.80 on Monday, a drop of more than 11%, to $30.05 per barrel – the lowest closing price since January 2016. Judging from the financial market’s reaction to the Fed’s interest rate cut, what the market sees is not the loose liquidity brought about by the Fed’s interest rate cut, but the seriousness of the current situation, including the epidemic and the economy, behind the interest rate cut.
Since the outbreak of the epidemic, the focus of the polyester market has been on the mutual switching between the demand side and the cost side. among. During the outbreak of the domestic epidemic, the market focused on the losses on the polyester demand side caused by the delay in downstream resumption of work and stagnant domestic consumption. However, since the collapse of the OPEC+ talks on March 6 and crude oil plummeting 30% to around US$30, the polyester market has experienced short-term decline. The focus once again returns to the cost side.
International crude oil has plummeted in recent days, polyester raw materials PX, PTA and ethylene glycol have fallen sharply, polyester cost-end support has collapsed, and downstream demand has fallen short of expectations, and the overall market has a strong wait-and-see sentiment. . Promotional mode has been launched one after another, and downstream buyers are buying at low prices. Polyester filament inventories have eased slightly. Polyester filament companies have traded price for volume. However, due to the slow resumption of work downstream, little effect has been achieved, and the industry has quickly entered a downward channel. In early March, due to preferential promotions by polyester filament factories, inventories eased slightly. Downstream weaving and some traders returned to a wait-and-see mentality after moderately replenishing their positions. The overall production and sales data performed generally, and the focus of polyester filament transactions further declined.
At present, domestic melt direct spinning polyester filament maintenance involves a total production capacity of 7.67 million tons. Recently, Wuchan Hongju, Lianda, and Zhenhui have During the week, Xinfengming, Fujian Jinlun, and Fujian Baihong facilities restarted, and the polyester filament industry started operating at 81.38%, an increase of 5.2% from last week.
Judging from the current status of the downstream industry, the downstream increase in March The resumption of work in elastic and weaving industries has accelerated. The comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang is 65.52%, an increase of 5.07 percentage points from the previous month. As trading markets such as China Textile City slowly open, the lack of terminal orders further hinders the progress of load improvement, and the consumption of raw materials is relatively limited. Most of them are stocking up before the end of the year. In terms of orders, due to the current fermentation of the international epidemic, foreign trade orders are slightly lower. There has been a decline, and companies are not optimistic about subsequent orders. At present, the stamina of downstream orders is insufficient. Domestic terminal consumption has stagnated in the first quarter, coupled with the rapid spread of overseas epidemics. We are worried that weaving orders will drop significantly year-on-year in the second quarter, and the peak season is likely to fail. At present, some weaving customers have reported that foreign trade orders from key overseas countries affected by the epidemic have shrunk significantly. As the epidemic spreads in the later period, this phenomenon is expected to intensify. In China, due to poor sales of clothing and home textiles in the first quarter, weaving orders were dragged down in the second quarter.
For the whole year, polyester production was originally expected to increase by 2.8 million tons, with a growth rate of 5.6%, but once The actual quarterly loss has been 1.5 million tons less than expected. Even if the output in the next three quarters remains as expected, the full-year growth rate will drop to 2.6%. But in fact, the outbreak of overseas epidemics will definitely shrink significantly in the later period, especially overseas demand. The loss of overseas demand will cause the growth rate of polyester production to continue to be revised downwards.
The domestic epidemic control situation is gradually improving, but the overseas scale continues to ferment. The international capital market has fallen sharply, dragging down the commodity market atmosphere. The COVID-19 epidemic affected domestic terminal consumption in the first quarter and affected foreign terminal consumption in the second quarter. At present, the polyester filament market and texturing terminal weaving companies generally have pessimistic expectations for the later period. Promotional shipments are the main focus. The contradiction between supply and demand in the short term is still relatively obvious. Under the guidance of the sentiment of buying up but not buying down, the downstream sentiment is high and the polyester filament enterprise warehouse��The overall situation is still at a high level. The promotion model may be continued in the future. </p
