On September 11, except for the 1809 contract, which was about to be delivered and continued to rise due to high spot prices, all other contracts fell.
As of the close at 15:00 on September 11, PTA’s main 1901 contract quoted 7494 points, down from the previous trading day 240 points, a decrease of 3.1%.
While the “crazy PTA” entered the accelerated downward channel, the polyester filament factory showed another story situation.
Polyester companies – helpless to limit production
Polyester companies have been under cost pressure recently, and their cash flow performance is not optimistic. Recently, there is news that:
Polyester filament factories have begun to have promotional activities. The discounts are mainly for FDY and DTY, with a discount of 150-200 yuan/ton depending on the volume.
In addition, there is news:
Xiaoshan Shuangtu has decided to stop slicing production starting from September 12th, every day Load reduction of 350 tons/day;
Wujiang Xinmin reduced production by 10%, involving 150 tons/day of filament and 150 tons/day of slices;
Zhangjiagang limits production to 100 tons/day;
Starting from August 11, Shaoxing Ancient Towpath has limited production to 200,000 tons, mainly supporting filament;
Shaoxing Tiansheng will limit production to about 300,000 tons starting from September 11, which will take about 45 days;
The author analyzed that there are several reasons for the chemical fiber factory to limit production this time.
1. In order to reduce inventory. Recently, downstream weaving manufacturers have begun to suspend production and limit production due to factors such as excessive raw material costs and environmental protection, and the consumption of polyester yarn is decreasing. Once the polyester yarn output is too high, the polyester yarn inventory backlog will have a significant impact on the production and sales of polyester companies. Therefore, the most important thing for polyester manufacturers to reduce production is to maintain low inventories.
2. Starting from September 4, the crazy PTA finally began to stabilize and showed a downward trend. On September 11, the main PTA futures 1901 fell by more than 3 %. But at the same time, the spot price of PTA remains high, at a high of 9,300 yuan. It can be expected that the cost of PTA will most likely continue to fall in the future, so it is indeed not a good choice to use PTA raw materials, which are at a high level at this time, for production.
3. The early increase in PTA was too high. Although the increase in polyester yarn was large, it was not as crazy as PTA. Therefore, even if PTA starts to fall, polyester prices are unlikely to fall in a short period of time. However, this is inconsistent with the expectations of downstream weaving factories, which will further affect the sales of polyester filament.
Weaving Enterprises – Waiting and Seeing in Tangle
September is the traditional peak season for weaving companies, but this year’s September is not as lively as in previous years.
Looking back on September last year, even the rush to buy “rag” polyester taffeta was ignited to the extreme again and again! Many weaving manufacturers reported that there were so many orders that they had no time to complete them.
After September this year, due to the sharp increase in raw material costs in the early stage, it is difficult for traders to quote prices that meet the psychological expectations of weaving companies. At present, companies are more cautious in accepting orders.
In addition, the recent decline in PTA prices has also made weaving companies particularly troubled. When it comes time to buy raw materials, if you buy, you are afraid that the price of raw materials will drop in the future. The cloth made at the current price will not be competitive in the market. If you don’t buy, there will be no raw materials to use, and the operation of the machine will be affected.
Editor’s note: Although according to the interviews, the traditional peak season of September has not yet arrived. However, on the premise that market demand does not change much in the short term, the peak season will eventually come. When the peak season encounters high raw material prices, who will ultimately pay the bill? </p
