Following the “four consecutive declines” in crude oil that began last week, U.S. and Brent oil continued to fall on March 18, with both falling by more than 9% at one point. WTI crude oil futures fell below $60 per barrel, a record high of 9% last year. The biggest one-day drop since last month.
As of the close of the day, the settlement price of WTI April crude oil futures closed down $4.60/barrel, or 7.12%, to $60.00/barrel. The settlement price of Brent crude oil futures in May closed down $4.72/barrel, or 6.94%, to $63.28/barrel.
After losing the support of crude oil, the prices of PTA and ethylene glycol also fell to varying degrees. Ethylene glycol, which has been so “relentless”, is now falling rapidly, with the price falling by more than 1,000 yuan/ton in 10 days.
Compared with polyester raw materials such as PTA and ethylene glycol, the price of polyester filament is relatively “strong”. Although the price has also fallen, the decline is not significant.
PTA and ethylene glycol as raw materials have plummeted, but polyester has not fallen much, which has led to the long-term decline of polyester. Silk profits rose sharply.
But the polyester factory is not happy about this. After the price of raw materials does not rise, polyester production and sales have continued They have been in a sluggish state for many days. Compared with the illusory profits in the “price but no market” state, the visible inventory growth is what they are more concerned about.
When the growth of polyester raw materials has slowed down and sales have experienced bottlenecks, downstream dyeing factories have become popular. Pressure and stoppages are common. Some dyeing factories have even received so many orders that the gray fabrics have begun to queue up for unloading, and the delivery time has also increased to about two weeks.
In addition, as shipping capacity continues to be tight after the epidemic, freight time has been lengthened. Downstream foreign trade companies have tighter time for textile traders than in the past. If some cloth bosses accept I placed some orders with a slightly faster delivery date. The dyeing factory was so busy that if I wanted to rush out the goods within the delivery date, I had to add money and sign for an expedited stamp.
Upstream crude oil prices have plummeted, polyester filament “has a price but no market”, but downstream dyeing plants are performing well. Why are the performance of upstream and downstream so poor? What about crack?
Business market conditions are overdrawn in advance
During the period before and after the Spring Festival, raw material prices have experienced sharp As prices rose, traders began large-scale stockpiling measures, and weaving companies cleared a large amount of inventory, but these inventories did not flow into the terminal market. When demand arises, these inventories are more popular with downstream companies because of their low cost.
This is equivalent to the fact that the weaving companies sold the cloth that should have been sold now at the beginning of the year, and now there are fewer new orders on hand. Naturally, there is no need to buy raw materials.
However, March is the traditional peak season for the textile market, so normal demand must still exist, and it is normal for dyeing factories to be busy.
Strategic contraction of major international brands
Some time ago, Uniqlo cut prices in Japan and GAP planned to withdraw from China News such as the market and ZARA’s parent company’s profits plummeted by 70% attracted the attention of textile people.
Under the influence of the epidemic, international brands with developed countries in Europe and the United States as their main markets will naturally be affected far more than some domestic clothing brands. After their performance was affected, these big clothing brands also generally adopted a contraction strategy.
As one of the main targets of China’s clothing fabric exports, major clothing brands have adopted a shrinking strategy, and the size and quantity of orders given will naturally be affected.
Of course, textile people do not need to be overly pessimistic. The rapid rise in raw materials in the early stage in a short period of time caused a certain bubble. The harder the rise, the greater the overdraft expectations, and the bigger the existing bubbles. Only by “popping” these bubbles will help the healthy development of the textile market, and “popping the bubbles” will take time.
From the perspective of the overall environment, the global epidemic is gradually being controlled, and the market is still mainly expecting positive market outlook. The “tear” in the upstream and downstream is only a temporary one. phenomenon will eventually return to normal in the future. </p
