Price promotions mean production and sales do not exceed 100, polyester prices rise crazily and then fall crazily, polyester prices go up but are on sale… Textile people will not be surprised by any weird situation after this year. Oil prices fell for two days and then rebounded! It soared 4%, the largest increase in the past two weeks. PTA followed suit, but polyester yarn was on sale for over 600 yuan/ton! After several days of sluggish production and sales, will polyester manufacturers finally turn things around?
“Spring” changes in crude oil and PTA prices
The number of Omicron infection cases is increasing exponentially in Europe, the United States and other countries. Countries such as Germany and South Korea have also re-implemented partial or complete lockdown measures in recent days to curb the emergence of cases. On the supply side, Libya’s largest Sharara oil field was temporarily closed, two major oil ports suspended exports, and crude oil production dropped by nearly 300,000 barrels per day, which may offset OPEC’s efforts to increase production. However, the short-term rebound has limited upside space. Although supply and demand are now balanced, looking forward, supply will still be in excess of demand, and subsequent changeable measures may lead to a continued downward trend in oil prices.
PTA is still in a cost-following state for the time being. Before the Spring Festival, due to the current fundamental situation of polyester, the demand is sluggish, and the raw material side is still relatively easy to fall and hard to rise. In December, there were more maintenance and restarts of PTA equipment, and new ones were put into production, maybe put into production. After completion, PTA will enter a de-library stage. As of December 21, the price of PTA was 4,535 yuan/ton. Following the changes in crude oil prices, PTA will still be in a volatile downward trend in the short term.
Costs have soared, and polyester yarns have been on sale
The strong rebound of crude oil has also led to a recovery in PTA, and the cost-side benefits are still supported for the time being. Polyester filament factories took this opportunity to focus on promotions, and the promotion range went up sharply, even lowering it by more than 600 yuan/ton, up to 700 yuan/ton! There are three reasons why manufacturers start promotions due to rising costs.
Reason 1
Production and sales have been sluggish for several consecutive days. In order to boost production and sales, it seems that polyester manufacturers have also grasped some “tricks”. When the cost of polyester yarns shows an upward trend, they start promotions and promote once a week. Fortunately, downstream companies are also more generous. Perhaps there is an element of strong promotion in it. A single promotion can change the usual sluggish production and sales, reaching 200%. As of December 22, the changes in polyester filament production and sales are as shown in the figure. The vigorous promotion on December 23 will also drive up production and sales, which are expected to be the same as in the previous period.
Reason 2
The inventory of polyester filament has been at a high level in the past five years. In addition, the downstream enterprises are going on holiday ahead of schedule. Polyester filament will face greater sales and inventory pressure in the future. The difference between supply and demand is too obvious. In order to control the pressure on inventory, polyester manufacturers have to start promotions and the intensity is very strong. Moreover, even if polyester manufacturers start promotions, they will still make profits and can reduce some inventory, as long as Downstream players are still willing to buy in, and promotions can still achieve the results that polyester manufacturers need.
Reason 3
In fact, promotion is also a gimmick for polyester manufacturers. After all, the current cost side is still changing. No one can predict whether the market will fall or rise. Downstream users are also in a wait-and-see state. Now the cost side is rising strongly again. Seize the downstream “today’s market” With the mentality that if you don’t buy it, you may not be able to buy it down, you will get rid of some inventory and conduct large promotions to seize the last wave of orders from downstream companies. It may be a little difficult for companies to stock up on goods this year, and the only way to control inventory is through vigorous promotions.
According to the current situation, the holiday is less than a month away, and holiday notices and work stoppage notices are already commonplace. The market is in a dilemma, and it can be said that textile people are in a difficult situation.
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