China’s ports have been very busy recently. More than 80 oil tankers have been floating in China’s offshore waters for a month, waiting to be unloaded!
A friend asked why so many oil tankers are crowded in China’s offshore waters to unload. ? In fact, it is because our domestic refiners and oil-related companies bought cheap oil in April and May! Affected by the epidemic, the arrival time of oil tankers at the port has been much slower than in previous years, so the cargo has only been arriving recently.
Some media said that at least 80 ships have arrived at ports such as Yingkou, Rizhao, and Qingdao I have been waiting in line for more than a month. As the world’s largest crude oil consumer, China has purchased a large amount of crude oil this year, so that there is a jam of oil tankers at the port, and there is a grand scene of queuing up to unload! Analysts and port managers say the congestion could last until the end of the month.
After seeing this news, the editor seems to know why the price of polyester filament never rises…
Polyester profits: It seems to have hit the bottom
At the beginning of the outbreak, the profits of polyester filament were still relatively high It was stable, but the polyester yarn at that time had a price but no market. After all, the factories were not operating, and no one was buying the polyester yarn. The high price made no sense. After resuming work and production in February, polyester yarn profits are also in a relatively good state. However, as the epidemic gradually broke out in Europe and the United States in March, the price of polyester yarn plummeted, and polyester yarn profits also began to dive. Along with the price of crude oil, it fell to the bottom. Although polyester profits have recovered somewhat after April, as the market entered the off-season in June, polyester profits fell again, even lower than in April.
The same is true for the price of polyester filament. Every time the polyester factory raises the price of polyester filament by a certain amount After the time passed, it immediately fell back. This scenario has happened more than once from the beginning of April to now.
The editor originally thought that the price of polyester yarn could not rise because the inventory was too high. Of course, , high inventory is indeed a more important factor. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 33-40 days; in terms of specific products, POY inventory is around 11-18 days, FDY inventory is around 22-32 days, and DTY inventory is around 22-32 days. By about 30-40 days, this kind of inventory is basically considered a historical high.
But from another perspective It seems that when polyester prices remain at such low levels, polyester companies are not unprofitable.
In recent years, in the polyester industry, the concept of “whole industry chain” has become more and more popular. Some leading polyester companies even have a chain from crude oil processing to the end. Factory installations for the entire industry chain of fabric and garment production, and other polyester companies are also working hard in this regard.
Although based on current PTA and MEG processing calculations, polyester filament is currently losing money on paper, but if we look at the cost of crude oil, the situation may not be the same. Same. In addition, in some leading polyester refining and chemical integration projects, raw materials such as PX and PTA have lower production costs than conventional means. Not to mention that the low-priced oil purchased in March and April is still in surplus, and many of them are still at sea. It’s floating.
And low-priced oil has also brought high profits. Taking Hengyi Petrochemical as an example, when the overall economy was stagnant due to the epidemic, revenue fell by 14% in the first quarter, and net profit But it still increased by 82%, which relied on the increase in gross profit-Hengyi Petrochemical’s sales gross profit margin in the first quarter reached 8.69%, almost double the 4.39% in the same period last year.
In comparison, Hengyi Petrochemical’s 8.69% gross profit is still the lowest among the three major private petrochemical companies. The other two are Hengli Petrochemical’s 22% and Rongsheng’s 22%. Petrochemicals 17.78%. All far exceeded the same period last year.
Raw materials are cheaper and profits are higher. In order to reduce inventory, the polyester giants have no incentive to increase the price of polyester yarn, and not raising prices can also help them. Greater market share. The cloth bosses have also seen the wonders of wave after wave of promotions for polyester filament.
If the big guys don’t raise prices, other smaller polyester companies will have no choice but to follow suit even if they lose money in order to maintain customers. It will be difficult for polyester prices to rise. .
Weaving enterprises: Polyester yarn is still unaffordable if it does not rise
Although the cost is low, polyester companies are also willing to increase prices if profits are high. But the fact is that the terminal market cannot support the rise of polyester yarn at all.
Since August, there has been a wave of market trends in the market, but most of them are products with limited market shares such as stretch fabrics and imitation memory. The “three giants” in the woven market are pongee, polyester taffeta and imitation. The silk market is still tepid, and the market seems to be heating up in the end, but the actual shipment volume is still limited.
As a weaving manufacturer that directly consumes polyester filament, it is now facing huge inventory pressure. The epidemic has not been controlled, the future prospects are unclear, and traders are unwilling to accept the goods. The cloth can only be piled in the warehouse. Occasionally, the production and sales of orders are uneven, which means that the working capital is gradually decreasing every moment.
Some weaving companies have started to take holidays one after another due to financial constraints. If polyester prices rise again, it may become “the straw that breaks the camel’s back.”
Editor’s note: Low-priced oil in March and April It has not been used up yet, and there is no improvement trend in terminal demand. Whether from the perspective of cost or downstream acceptance, it is difficult for polyester prices to rise significantly in the short term. But on the other hand, the fact that polyester yarns are not rising is good news for weaving companies. When cloth prices are difficult to rise, low raw material prices can at least sustain the cash flow of textile companies for a longer period of time.
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