The epidemic has caused a sharp drop in demand for crude oil, but Russia still refuses to further reduce production. Negotiations between the Organization of the Petroleum Exporting Countries (OPEC) and Russia broke down, and Saudi Arabia announced a reduction in production. The price war and plans to increase production in April are the main factors triggering this round of plummeting oil prices.
This is the second time in the history of the U.S. stock market that a circuit breaker has occurred. The global market is experiencing a “blood collapse”, and markets in many places have already or are about to fall into a bear market.
Affected by the plunge in international crude oil, “Black Monday” occurred in the global financial market, and futures were also “terrible.” On the 9th, the main 2005 contract of PTA futures fell to the limit of 4078 points, and the main 2005 contract of ethylene glycol futures fell to the limit of 4069 points.
But the decline did not end. Panic over the US stock market circuit breaker and crude oil flash crash continued to spread. On the 10th, New York crude oil opened at US$30.370/ton. Subsequently, It repaired slightly upward, but the strength of the repair was not strong, and the upward momentum of crude oil was seriously insufficient.
Crude oil plunge increases market vulnerability
The continuous spread of the epidemic has dealt a heavy blow to the already depressed global financial market. Now the collapse of crude oil prices has become a crushing blow. Another straw for the financial market, commodities are also deeply affected.
On the 10th, the main 2005 contract of PTA futures opened at 3872 yuan / ton, and then repaired upward, but not by much.
In terms of ethylene glycol, ethylene glycol futures The main 2005 contract opened at 3,760 yuan/ton, a decrease of 309 yuan/ton compared with the settlement price on the previous trading day.
PTA and ethylene glycol futures are weak, causing the internal price to fall further. As of the 9th, the internal price of PTA fell to 3690 yuan/ton, and the internal price of ethylene glycol fell to 3,690 yuan/ton. The price fell to 3,700 yuan/ton, both falling to low levels in many years.
Except for insufficient support from crude oil , the fundamental weakness of PTA and ethylene glycol has further exacerbated the decline of their prices.
As for PTA, as of March 6, PTA social circulation inventory was around 2.63 million tons. Compared with the 1.38 million tons inventory before the year, A substantial increase of about 1.25 million tons, PTA’s social inventory has reached a peak, dragging down its price rise.
In terms of ethylene glycol, as of March 6, the inventory of ethylene glycol at the main port in East China was around 930,000 tons, more than double the inventory of 430,000 tons a year ago. Last year, we have been saying that low inventory is one of the important factors supporting the ethylene glycol market. Now it seems that ethylene glycol is expected to have accumulated inventory, and it is difficult to change for a while.
Contrary to the decline of PTA and ethylene glycol, polyester filament unexpectedly stabilized today!
Look specifically:
A major polyester yarn manufacturer in Tongxiang is stable;
Taicang Huaru Polyester POY is stable;
Polyester yarn from a major mainstream factory in Shengze, Jiangsu is stable;
Shaoxing Jiabao FDY reported stable;
Zhejiang Juxing polyester yarn reported stable;
Zhejiang Kaishi DTY reported stable…
Under the situation where crude oil rebound power is insufficient and upstream costs have collapsed, polyester filament is “going in the opposite direction”. What is the reason?
Downstream “buy up” mentality
According to the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 33-43 days; in terms of specific products, POY inventory is around 27-33 days, FDY inventory is around 28-34 days, and DTY inventory is around 28-34 days. Then it will take about 34-43 days.
As can be seen from the picture, the current inventory of polyester yarn is at a high level, but the price has fallen to a low level. Weaving manufacturers have “buy up, not buy down.” The psychology of the market is that the lower it falls, the less likely it is to buy, so this stabilization of prices also has a basis.
Mainstream polyester manufacturers maintain stable prices
On the 9th, due to the collapse of crude oil,Polyester products are all green, and the prices of polyester filament products have been reduced by about 100-200 yuan/ton, causing polyester production and sales to return to the downturn. On the 9th, the polyester filament market production and sales in Jiangsu and Zhejiang regions were light, with the average production and sales of mainstream manufacturers only at 20%-30%.
Last week, due to the rebound in downstream demand, polyester production and sales rebounded significantly, with the average production and sales remaining around 80-90%. Now that production and sales have dropped again due to the plunge in crude oil, polyester manufacturers certainly want to stabilize prices and see if they can get weaving companies to foot the bill.
Weaving support, demand rebounds
Recently, the operating rate of weaving manufacturers has been effectively improved. According to statistics from the China Silk City Network, the current operating rate of weaving manufacturers in Shengze has risen to over 70%. Although weaving manufacturers more or less stocked up on raw materials years ago, as long as the machines are on, even if they are not much Stock up, you still need the raw materials.
At the same time, although according to the survey, most companies said that due to the outbreak of the epidemic, the number of orders received at this stage has shrunk significantly, but the market still has bright spots to follow. Simulated silk and pongee have recently Sales are better. Although there are many resistances in foreign trade, the rigid demand for foreign trade still exists. Even if the order volume is reduced now, it cannot be ruled out that there will be concentrated orders in the future. The existence of demand for weaving has supported the price of polyester yarn.
I don’t know how long this wave of crude oil price war will last. As the source product of the entire industry chain, it will naturally have a big impact on the market. Textile products as an industry A member of the chain is naturally not immune to disaster. The price of polyester yarn has stabilized this time, but whether the price can be maintained in the future depends on many factors. If market panic further deepens, crude oil will further bottom out, and polyester prices are likely to fall.
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