[Introduction]: In August, due to the impact of power rationing policies in Zhejiang and Jiangsu, the operating rate of the polyester industry, especially in the downstream areas, dropped significantly. The shrinking market demand led to the continued growth of polyester filament inventories, and the problem of mismatch between supply and demand became prominent. However, with the oil price The rebound in raw materials and raw materials boosted the confidence of manufacturers. At the end of the month, the polyester filament market trend was divergent, with mixed expectations of rise and fall.
Summer high temperatures swept across the eastern coastal areas, with many places in Zhejiang experiencing temperatures of 40°C. The falling water level of the Yangtze River resulted in insufficient supply of hydropower generation. In order to ensure people’s livelihood, many areas in Zhejiang have implemented strict power rationing policies since early August. Affected by this, the downstream texturing, printing and dyeing industries, as links with high energy consumption in the polyester industry chain, were the first to be included in the power restriction list. As the downstream operation rate gradually declines, polyester filament yarn has also experienced a tepid market. On the one hand, cost pressure has not diminished, polyester filament yarn profits have remained at a low level, and the willingness to reduce prices is not strong. On the other hand, downstream users have become more aggressive in buying prices. The low sentiment has further intensified the high pressure on polyester filament stocks, leaving polyester filament in a dilemma. Towards the end of the month, some downstream users have a certain demand for replenishment, so they should replenish their positions appropriately at bargain prices. Partial production and sales of polyester filament have picked up, and manufacturers are gradually becoming more willing to ship. The market has gradually seen profit-making shipments, and the market downward risk has intensified. However, with the rebound in oil prices, the main raw material PTA has fluctuated and strengthened. Supported by the cost side of polyester filament, manufacturers have shown a price support mentality, and the focus of market transactions has stabilized. However, the long-awaited “promotion” activities of downstream users are expected to be aborted, and raw material inventories At a low level, downstream users have a certain demand for replenishment. Therefore, polyester filament production and sales are booming today, with an average daily production and sales rate of nearly 200%, and some individual production and sales are as high as 900%.
Data source: Longzhong Information
As can be seen from the above figure, polyester filament has continued its pulse production and sales model this year. Overall in August, the production and sales situation during working days was unsatisfactory. The overall production and sales rate was mostly 30-50%. Partial production and sales picked up on weekends, and the overall production and sales rate was 100%. -200%. Taken together, the average monthly production and sales rate is less than 80%. The inventory of polyester filament companies continues to grow, causing the polyester filament market to show a downward trend this month. The weak and stable market has lasted for half a month, and the market sentiment is high. However, the current willingness of leading companies to stabilize prices is strong, coupled with the boost in cost and the slight increase in terminal demand. Under the combined effects of many favorable effects, the demand for polyester filament has picked up, giving companies a boost. A shot in the arm, the bullish atmosphere in the market is gradually heating up.
Data source: Longzhong Information
In recent years, the main driving force for polyester filament prices to rise several times comes from cost-side support, especially the price trend of the main raw material PTA is relatively similar. As shown in the figure above, PTA will fluctuate and rise in 2022. The cost pressure of polyester filament will be highlighted, and the focus of transactions will rise simultaneously. Since August, PTA has been running weakly, and polyester filament has also fallen into a stalemate. At the end of the month, as oil prices rebounded, PTA prices fluctuated upward. The cash flow of polyester filament yarns continues to be compressed, and most models have cash flow losses. Some polyester filament yarn manufacturers have a strong willingness to support the market. At the end of the month, they may follow the trend of raw materials. If raw materials continue to rise, polyester filament yarns will be partially raised. If the raw materials trend overnight, polyester filament yarn prices will rise. Or maintain stability and wait and see.