Yesterday, PTA futures prices rose sharply, but in the spot market, polyester factories generally had disguised promotions. It is worth mentioning that unlike previous direct price reduction promotions, this polyester factory promotion does not directly reduce prices. Instead, against the background of rising raw materials, the preferential prices remain unchanged and the price is mainly stable. Some varieties even have reduced discounts.
“In the past, when the performance of the raw material side was relatively strong, the price of polyester represented by filament would also follow suit, but this time the increase was relatively small, and even prices stabilized or fell.” Insiders in the industry It seems that the behavior of the polyester factory is actually compressing its own profits.
Through combing, the reporter found that in the polyester industry, price reduction promotions often occur.
In this regard, Chen Sheng, an analyst at Guomao Futures, explained that polyester factories usually carry out promotional activities at irregular intervals after the inventory of finished products is significantly accumulated, in order to achieve the purpose of reducing inventory and maintaining stable production.
“Usually, the polyester promotion cycle matches the stocking cycle of downstream weaving raw materials. When the downstream raw material stocking is low and there is urgent purchase demand, polyester will pass on profits to the downstream through price reduction promotions or by keeping silk prices stable when costs rise. Usually promotions It will lead to increased production and sales of polyester, ease the pressure on polyester inventory, and smoother demand in the downstream of the industrial chain.” Liu Siqi, analyst at Zijin Tianfeng Futures, believes.
The reporter learned that the polyester load has recently increased to 83%, while the recovery pace of looms in Jiangsu and Zhejiang has been slow and is currently around 70%. After the holiday, with the release of new upstream PX-PTA production capacity, PX and PTA processing fees have been compressed to varying degrees.
According to Hongye Futures analyst Zhang Yongge, although polyester factories have small profits, it is difficult to survive alone when effective orders are not good. “Polyester filament has been in storage for 4-6 days since the holiday. The recent disguised price cuts by polyester factories are also to prevent the pressure of continued increase in inventory in the future,” she said.
In fact, downstream price reduction promotions, on the one hand, reflect the high inventory of manufacturers and the weakness of the downstream, on the other hand, they can indeed boost the demand for raw materials to a certain extent. Judging from the market price of raw material PTA futures yesterday, it showed an increase of more than 2% during the day, which may have a certain relationship with the impact of downstream profit-sharing promotions.
“Generally, large-scale price reduction promotions will lead to a surge in market production and sales and destocking, while the effect of factory price reduction promotions depends on actual downstream orders.” Zheshang Futures analyst Zhu Lihang said.
“Judging from the existing effects, the degree of boost in production and sales is limited, which of course is also related to the low discount rate and weak market orders.” Zhu Lihang said that based on the current situation, the willingness of downstream replenishment is relatively average. , limited by the terminal order situation, there has not been much improvement for the time being, or the main demand is for replenishment.
“Yesterday, the production and sales of polyester yarn in Jiangsu and Zhejiang were partially increased, with the average estimate at around 3:30 pm at 150%. This is the first increase in production and sales of polyester yarn after the Spring Festival in 2023. The promotional effect is in line with market expectations to a certain extent. If the prices of raw materials PTA and ethylene glycol It remains stable and strong, and the enthusiasm for short-term weaving stocking may increase.” Liu Siqi said
In Chen Sheng’s view, there are currently two reasons why the downstream willingness to replenish goods is relatively general: on the one hand, the downstream is still in the process of gradually increasing the load, and there is still a shortage of personnel. On the other hand, overseas orders have not yet been placed intensively, and it will take time for domestic demand to fully recover.
However, considering that the current raw material stocking days at the terminal are very low, and the raw material stocking in downstream links is low, once the subsequent demand can improve, the market will increase the intensity of stocking and replenishment.
“Currently, the terminal’s raw material stocking days are very low, at a low level for the same period in history.” Chen Sheng said that although the current orders are average, downstream factories are more optimistic about the market outlook, and the expectations of domestic policies are obvious, which will promote Increase in demand. As the peak season of “Gold, Three, Silver and Four” approaches, subsequent orders may improve.
Zhu Lihang also said that when raw material stocks are low, once demand orders improve, the demand for replenishment will strongly stimulate polyester production and sales. At present, the performance of the printing and dyeing link in terminal textile demand is relatively outstanding, and the order arrangement situation exceeds expectations. “Printing and dyeing is an intermediate link in textiles, and good printing and dyeing orders also reflect the demand of the industrial chain to a certain extent.” He said.
In this regard, Chen Sheng believes that the start of printing and dyeing is gradually picking up, differentiated competition in the market is intensifying, overseas orders are sluggish, and the domestic demand market has become the focus of competition. Previously export-oriented production companies are also seeking domestic orders. In his view, expanding domestic demand may dominate subsequent market conditions.
“From a time perspective, the ‘gold, three, and silver’ periods in the first half of the year are the traditional peak season for demand in the polyester market. It is highly likely that terminal demand will improve this year compared to last year during the lockdown. Pre-holiday epidemic prevention and control measures have been optimized and adjusted, and the market Expectations for improvement in the later period have increased, and polyester filament has been significantly destocked. Against the background of weak post-holiday reality and weak raw materials, downstream stocking intentions have weakened, but the approach to the peak season may prompt some low-stock manufacturers to have a certain willingness to replenish stock. “Zhang Yongge said.
Liu Siqi believes that because the Spring Festival is too early this year and the weather is still cold after the holiday, the arrival of personnel and the start of demand are slower than the same period in previous years. However, currentlyIt seems that the operating rates of polyester, weaving, printing and dyeing have returned to normal. As the startup load increases, the digestion speed of raw materials accelerates, and the stocking of raw materials in some weaving factories is reduced to less than a week. As raw materials rebound, polyester loses profits, and downstream inventory replenishment and stocking increase. “As the weather gets warmer, orders will improve seasonally. This year’s growth in textile and apparel orders may be more reflected in domestic demand,” she said.
As far as the overall market situation of the polyester industry chain is concerned, the raw material end PTA and MEG processing fees are currently in a loss situation. Factory maintenance is expected to increase in the second quarter. The narrowing of supply may improve the supply and demand pattern to a certain extent, which will have a certain impact on the market. boost. “From a phased perspective, there may be a certain rebound demand for raw materials, and downstream companies will replenish their stocks based on their own inventory dips,” Zhang Yongge said.
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