The Rise Of Raw Materials Led To A Sharp Rise In Pure Polyester Yarn After The Festival

According to the price monitoring of the business agency, the domestic pure polyester yarn price rose sharply after the festival. On October 8, the average price of pure polyester yarn in Shandong was 14675 yuan / ton, up 300 yuan / ton or 2.09% compared with that before the festival. Driven by the rapid rise in costs, the price of pure polyester yarn was raised, and the transaction was gradually followed up. During the national day, the trading was fair, and the downstream and traders had centralized replenishment positions. At present, the market growth of pure polyester yarn is basically synchronized with that of raw materials, and the cash flow is maintained at 500-600 yuan / ton. Early stock less factory after the festival has a small number of replenishment action, but the price of staple fiber has fear of heights.

Upstream raw materials: crude oil rose sharply during the holiday, and the strong cost side led to the sharp rise of polyester staple fiber in the second half week of national day. The price rose intensively on October 5. Since then, some factories have made up the price. At present, the mainstream quotation in East China market is 7700-7800, which is 300 yuan / ton higher than that before the festival. In terms of installation, Fujian Jingwei 4-7 reduced production by 220 tons / day due to power restriction. During the first half of the national day, the transaction situation was relatively general, and it improved slightly in the later period. After the festival, some staple fiber factories in Jiangsu and Zhejiang will resume operation. Fuweier, Shidai, Rongli chemical fiber, hengming, staple fiber load will return to 76%. Fujian began to implement the "double control" policy, focusing on the load changes of local staple fiber factories.

Downstream demand: the terminal demand is still weak, coupled with the impact of power rationing policy, the sustainability is still to be observed. During the national day, after Jiangsu power rationing was gradually released, the weaving machine started to rise rapidly to around 70%. However, the power limit in the fourth quarter will continue, and the weaving start-up load will fluctuate obviously. From January to August, domestic demand was weak, and the domestic textile and clothing retail sales increased by only 1.6% year-on-year in 2019; From January to July, due to the transfer of Southeast Asian clothing orders since the fourth quarter of last year, foreign demand was fair. China's textile and clothing exports peaked and gradually began to fall. In the first quarter of this year, the growth rate of China's textile and clothing export (excluding epidemic prevention) has declined since the second quarter, while that of Southeast Asia continues to rise.

Aftermarket expectation: under the background of strong cost and weak demand, if the dual control is relaxed and the upstream load rises, it will return to the logic of accumulated inventory in the industrial chain, and then to the negative feedback from the demand side, and the price transmission will be difficult. If the dual control efforts continue, then the industrial chain inventory is still in the logic of de stocking, and the price transmission can continue.

Concern 1: the demand side pays attention to the order receiving situation of export orders in spring next year. Can the recent decrease in ocean freight be conducive to the order receiving? On the supply side, it is necessary to pay attention to the sustained reduction of production at the supply side caused by the dual control of energy consumption, and re evaluate the balance of supply and demand.

Attention 2: how to implement the dual control policy in October remains to be observed, and some of the upstream staple fiber factories and yarn mills are back to work. However, Fujian Province has entered the area of double control and strict management, which has a great impact on polyester short and polyester yarn supply and demand.