A temporary drop in price is not terrible, but the pace of decline cannot be stopped. At this stage, polyester filament is in such a passive situation. After late June, the price of polyester filament began to plummet.
Since Iran and Israel announced a ceasefire on June 24, although the situation in the Middle East still showed some repetitions, the upward momentum of crude oil was directly interrupted, and the previous gains were quickly recovered in the next few days. The price of polyester raw materials fell accordingly. The price of polyester filament fell with a lag of several days, but it also opened a downward channel. But what was unexpected and reasonable was that after the price of polyester filament fell back to the level before the conflict, the decline did not stop, but fell by 50 today and 100 tomorrow. Today this company fell, and tomorrow that company fell, and the overall market fell into a deep decline. Take polyester FDY 75D/36F as an example. Before the Israeli-Palestinian conflict, the price of polyester yarn of this specification was 7,100 yuan/ton. On June 24, the highest point rose to 7,450 yuan/ton. It has now fallen to 6,950 yuan/ton, 150 yuan/ton lower than before the conflict, and the price is still on a downward trend.
The decline of polyester yarn is largely due to the serious lack of purchasing power in the downstream. On the one hand, in the wave of polyester filament prices that stopped falling and rebounded in mid-May, a large number of weaving companies have been replenishing their stocks one after another, especially in the surge caused by the Israeli-Israeli conflict in June. The weaving companies that have the ability and willingness to hoard raw materials have almost completed the replenishment. The remaining companies that are willing to buy raw materials are almost all companies that adopt the strategy of replenishing stocks based on rigid demand. The characteristics of such companies are that as long as the price fluctuation of raw materials does not exceed a range, they basically buy and use raw materials as they go. It is difficult to form a new round of polyester market by relying on them.
On the other hand, as the weather gradually gets hotter, the traditional off-season is superimposed with high inventory and low profit. This summer, the downstream shutdown scale is large. Many factories that have not stopped production in the past few decades have also started to take holidays this summer, which further reduces the demand for polyester filament.
However, with the loss of support in the downstream, the operating rate of polyester has increased instead of decreased. Recently, the capacity utilization rate of polyester filament has increased slightly. Compared with the downstream field, the difference in operation is obvious. The operating rate of the downstream stretching, textile, and printing and dyeing industries has been gradually reduced since the end of May. At present, the operating rate of chemical fiber weaving in Jiangsu and Zhejiang is less than 60%, among which the operating rate of circular machines and warp knitting is 30-50%, and the operating rate of water jet looms is slightly higher than that of other models. The overall operating rate is at the level of 60-70%. The overall operating rate of stretching is 60-70%, but there is great resistance to the shipment of stretch yarn in the near future. Small stretching manufacturers are still expected to reduce and stop production, and the operating rate is expected to continue to decline. At the same time, it means that the demand for polyester filament will further decline in July, and the production and sales pressure of manufacturers will be prominent.
The problem of mismatch between supply and demand in the polyester filament market was more prominent in July, while the market had already started the profit-sharing promotion mode in June, but the effect was minimal. As a result, the inventory of manufacturers increased slowly. In early July, the inventory of polyester filament increased slightly, and the average inventory level of the industry was around 24 days, an increase of 18% compared with the end of June. Among them, POY increased significantly, up 4-5 days compared with the end of June. If the price of polyester filament is to stabilize, curbing the growth of inventory is the first step, which may require a new round of load reduction measures in the upstream.
