On February 3, the first day the futures market opened after the Spring Festival, the main 2005 contract of PTA futures plunged 326 points, a drop of 6.8%;
On February 4, the main force of PTA futures continued to fall by 108 points, and the final closing price was 4362 points, a decrease of 2.42%;
On February 5, PTA futures finally ushered in a The wave rebounded. As of the closing at 15:00, the final closing price of PTA futures was 4398 points, an increase of 66 points or 1.52% from the previous trading day.
PTA futures began to rebound after a sharp fall. What was the reason? Will it continue to fall or gradually pick up?
Why did PTA futures rebound?
After the panic, prices returned
The low price of PTA is the main reason for the rebound of PTA futures. Looking at the PTA futures currently hovering around 4400-4500 points, who would have imagined that more than a year ago (August 2018), the hot topic of discussion was whether the price of PTA would exceed 10,000.
But judging from the current situation, let alone 10,000 points, even exceeding 5,000 points has become a luxury in a short period of time.
Due to the impact of the epidemic, the market generally adopts a bearish attitude towards this year’s economic situation. On February 3, whether it is Shanghai A-shares or various futures, Generally, there was a sharp decline trend, with ethylene glycol futures falling by nearly 6% and PTA futures falling by nearly 7%.
But after all, these declines contain a lot of panic in the market. Now that a few days have passed, some of the panic in the market has been released. At this time, futures prices have increased again. Begins to return to its own value.
High quality and low price, Chinese textiles are irreplaceable
PTA Whether the price of PTA futures rises or falls, it depends on polyester filament manufacturers to foot the bill, and the price of polyester filament affects the progress of weaving companies purchasing raw materials. Therefore, in the final analysis, the value of PTA futures is still determined by the Chinese textile industry. Determined by fundamentals.
Although the textile industry has accelerated its transfer from China to Southeast Asian countries in recent years, most of the transfers are still low-end industries. Some products with slightly technical content cannot be fully produced in Southeast Asian countries due to supporting facilities, worker quality and other reasons.
In some countries with higher technical levels such as Europe, the United States, Japan and South Korea, the cost determines that it is impossible to produce high-quality and low-price textiles. Therefore, in the short term, these products There may be a backlog of orders, but it is indeed difficult to find a suitable alternative region to transfer.
So the rebound in PTA futures is not about confidence in future raw material prices, but rather confidence that China will eventually defeat the epidemic and the entire huge industry that China’s textile industry has accumulated over the past few decades. confidence.
The bad news still dominates
However, we must also see that although there are some positive factors in the long term, in the short term, there are still many negative factors.
If the start of construction continues to be delayed, it is unknown when work will resume
2 On February 4, China Oriental Silk Market once again issued a notice to postpone the resumption of work, and the market opening time was adjusted to after 24:00 on February 20 (the twenty-seventh day of the first month).
On February 2, Shaoxing Keqiao also issued a notice that all companies must not resume work before February 17.
On February 5, Guangdong Zhongda Textile Market even issued a notice announcing that it would postpone the opening of the market indefinitely.
In the textile industry under the influence of the new coronavirus pneumonia epidemic, except for a few companies that produce medical protective equipment, almost all remaining factories are suspending production. . Although textile markets across the country have issued notices to resume work, the specified time has been repeatedly postponed. It is still unknown whether the time will be postponed in the future and when production can truly resume.
The “world’s factory” has shut down, and the global economy has been severely hit
This is also an important reason why the epidemic has begun to enter a concentrated outbreak period. From the data that the editor has seen, the daily increase in the number of confirmed cases of novel coronavirus across the country in recent days has almost exceeded 3,000. This number makes the editor feel numb.
On the one hand, the outbreak of the epidemic will significantly reduce demand, especially for clothing.Nowadays, most people are “squatting at home” in response to the national call for business. Under such circumstances, clothing sales will naturally be affected.
The same is true for foreign trade. In the great wave of economic globalization, China, as the “world’s factory”, plays a decisive role in the global manufacturing industry. The outbreak of the epidemic not only makes China’s textile exports have stagnated to a certain extent, and more importantly, it may greatly hinder the economic development of most countries in the world. Under such circumstances, it is not surprising that the production and sales of textiles have encountered resistance.
What can I use to save you, polyester inventory
In 2019, the polyester industry has been plagued by high inventory. The average inventory of polyester factories reached a maximum of 24 days. Coupled with the unfavorable destocking market last year, as of the Spring Festival holiday, the polyester factory’s Inventories are still at a high level.
Now weaving companies have delayed the start of operations, but a large number of polyester factories are still producing continuously For polyester filament, in the long run, when weaving companies resume work again, the amount of polyester yarn inventory in polyester factories will be unimaginable. Under the pressure of such high inventory, the price of polyester products is likely to drop again.
Polyester production is discontinued or increased, and weaving stocks are expected to be digested
With both good and bad news intertwined, what changes will occur in the polyester industry and textile market in the future?
In terms of polyester equipment, due to the impact of the epidemic during the Spring Festival, the market sentiment has become more pessimistic. Combined with the sharp drop in international oil prices since mid-January, it is expected that the major petrochemical industry will be under dual macro and cost pressures. Product prices will be significantly under pressure. On the one hand, the start-up time of polyester equipment after the holiday is likely to be delayed; on the other hand, due to the impact of high polyester filament inventory, the polyester industry may further increase production shutdowns and maintenance in the future.
PTA partial device maintenance schedule
In the weaving market, because weaving companies generally delay the start of production, judging from the current situation, inventory fabrics will be the main sales force of textile companies in a short period of time. Last year, the stock of conventional products piled up like a mountain. This year’s epidemic broke out, and production capacity was limited. The environment finally has its place. It is foreseeable that after the formal resumption of work, with the gradual arrival of orders, the printing and dyeing, coating, lamination and other industries will most likely usher in a wave of order peaks.
Editor’s note: The rebound of PTA futures on the 5th may be just a normal adjustment after the sharp decline. As the epidemic continues to ferment and the start of work of weaving companies is further delayed, PTA may continue to fall in the future. But even so, we still can’t give up hope. After the storm, comes the rainbow. I believe that with the joint efforts of everyone, the epidemic will be under control. By that time, everything will be fine.
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