Can polyester filament continue to rise in August?

Under the support of cost, polyester filament began to rebound at the end of July. However, the current trend of dual raw materials is weak and has shown a downward trend. Without cost support, can polyester filament continue to rise?

Thanks to the support from the cost side, polyester filament started to rebound in July, and the cost support was strong in the first half of the year. At the end of June, polyester filament companies had a good effect of destocking, so manufacturers were reluctant to sell at low prices, and their quotations followed the rise of raw materials . At this time, the operating rate of downstream texturing and weaving enterprises is showing a slight decline, and the resistance to high prices is heating up. The production and sales of polyester filaments are sluggish. The average inventory days of sample companies gradually increased from 17.8 days to around 19 days. After the middle of the month, the attitude of polyester filament manufacturers Disagreement, leading companies raised their quotations within a narrow range, most companies maintained stability and waited and watched, individual companies were loose in negotiations, the focus of market transactions did not fluctuate much, and some downstream users were in high spirits, waiting for promotions at the end of the month.

However, the international oil price continued to rise, and polyester raw materials followed its rise and fluctuated. Compared with the beginning of the month, the price of FDY only increased by around 350 yuan/ton, and the price increase of DTY at the end of the month and the beginning of the month was less than 100 yuan. As can be seen from the figure below, the cash flow of polyester filament continues to shrink, with POY losing a lot and FDY near the breakeven line.

Experiencing the long-term cash flow loss of enterprises under the impact of the epidemic last year, this year polyester filament manufacturers focus on profit restoration. Even though the raw materials continue to rise insufficiently, in view of the cash flow loss, polyester filament manufacturers are more willing to support the market . On the other hand, there are also expectations of an increase in the demand side in August.

Although the overall operating rate of the downstream texturing, weaving and even printing and dyeing industries has shown a slight decline, it is still higher than the level of the same period last year. In the downstream field, the operating rate of chemical fiber weaving in Jiangsu and Zhejiang regions has increased significantly year-on-year. Recently, the demand for fabric orders in autumn and winter has increased slightly. The batch trial orders of early winter fabrics, sweaters and velvet thermal products can still be shipped. Added to the recent increase in cost, downstream cloth merchants are enthusiastic about hoarding goods. At present, the specific measures of the power rationing policy have not been implemented, and the power consumption of enterprises is stable. The operating rate of some factories has dropped slightly due to financial problems, and the overall operating rate is relatively stable. As a barometer of the demand for the polyester industry chain, the overall operating rate of the printing and dyeing industry is at a weak level, far below the level of industry prosperity and decline. There is no significant change in domestic and foreign trade orders, and the atmosphere for domestic trade finished products is not high. Only some scattered orders and online sales orders are the main ones. Most of them are just in need of stocking up in the market. Increase, so domestic traders are not willing to accept orders, and brand owners are considering the suppression of finished product inventory, and are currently mostly in the wait-and-see and clearance stage. The weak global economy and the shrinking demand for clothing and textiles in Europe and the United States have led to a decline in the industry's prosperity, which will inevitably affect the domestic market demand for clothing, textiles and textile raw materials.

However, September-October is the traditional peak demand season in the second half of the year, and the industry still has high hopes. At present, many regions in Zhejiang are affected by the Asian Games, and the operating rate of polyester and downstream fields is expected to decline. Excluding the maintenance of other equipment, affected by the Asian Games, it is expected that more than one million tons of domestic polyester filament equipment will be reduced or stopped in early September. Therefore, In mid-September, the utilization rate of polyester filament production capacity is expected to drop by 4%-5% to around 82%. Moreover, during the Asian Games, local transportation will be affected to a certain extent, so some end users are considering placing orders in mid-August. On the whole, the short-term cost support has weakened, and the rise of polyester filament has been weak, or it has been consolidated at a high level. However, with the increase in terminal demand after the middle of the month, the polyester filament market is still expected to rise, and the monthly average price is slightly increased month-on-month.