Polyester filament: “low returns” in bleak market conditions

[168TEX News] In September, against the background of oversupply, international oil prices fluctuated in a range, and the overall price was still on a downward trend; as of the 30th, the price of crude oil futures for November delivery on the New York Mercantile Exchange closed at 45.09 per barrel, at 45.09 per barrel. It fell nearly 8.4% in September; at the same time, ICE Brent crude oil futures prices for November closed at $48.37 per barrel. The same is true for the market trend of raw material PX, with the center of price showing a volatile and consolidating trend. As of the end of September, its Asian prices were concentrated at US$757/ton FOB South Korea and US$778/ton CFR China. With the fluctuations in the upstream raw material market, the polyester market as a whole was weak in September and has not yet shown positive momentum; under this restriction, the polyester filament market has also continued to be weak in the recent period, and various products such as FDY and POY are still weak. DTY market prices have all fallen to a certain extent. So what kind of situation are polyester filament manufacturers facing recently? What is the cash flow situation of polyester yarn manufacturers?
1. Wide fluctuations in upstream raw materials
First of all, we can understand the trend of the upstream raw materials market in the polyester market in the near future. The overall fundamentals of PTA have not changed much recently. The current market price of PTA has maintained a wide range of fluctuations, and the center of gravity of the internal price is mostly around 4,400 yuan/ tons; however, the MEG market has been slightly more volatile, especially since mid-September, its price center has continued to trend downward. At present, its price has dropped to around 5,350 yuan/ton. Restricted by the weak operation of the upstream raw material market, this also makes it difficult to stop the decline in polyester filament prices in terms of cost.
2. Brief cost analysis of polyester products
Now let’s take a closer look at the cash flow status of various products in the polyester filament market in the recent period. We calculated based on the market price on September 23. Among them, the mainstream price of PTA in the internal market is concentrated at around 4,460 yuan/ton, and the mainstream price in the MEG internal market is around 5,420 yuan/ton.
The first is direct spinningFDY (polyester filament), FDY=0.86×PTA+0.34×MEG+1,300 yuan/ton; from this calculation, the FDY production cost is about 6,979 yuan/ton. As of the end of the month, the average quotation of FDY 150D from mainstream manufacturers in the domestic market was around 7,100 yuan/ton, which was a decrease of nearly 500 yuan/ton compared to the price at the end of last month. It can be seen from this that although FDY manufacturers are still profitable this month, their profit margin is not large and can only be regarded as a slight profit.
Followed by direct spinningPOY (pre-oriented yarn), POY=0.86×PTA+0.34×MEG+900 yuan/ton, from which the POY production cost is calculated to be around 6579 yuan/ton; and at the end of the month The average quotation price of POY 150D from mainstream manufacturers in the domestic market is around 6,300 yuan/ton, which is a significant drop of nearly 600 yuan/ton compared with the price last month, which is a large drop. Therefore, it is not difficult to find that POY manufacturers suffered losses in September.
Finally, let’s look at DTY (textured yarn), DTY = POY + 1,300 yuan/ton; from this, it is calculated that the production cost of DTY is approximately 7,879 yuan/ton. At present, the average quotation of DTY 150D by mainstream manufacturers in the domestic market has fallen back to about 8,250 yuan/ton, which is a decrease of nearly 400 yuan/ton compared with the price last month. From this, we can calculate that the profit level of DTY manufacturers also increased in September. has shown a downward trend, and its cash flow space has weakened, but it is considered to be relatively profitable among polyester products.
3. The market outlook for polyester yarn is not optimistic
Judging from the current market conditions, although with the decrease in the cost price of upstream raw materials, most polyester products still have a certain profit margin. However, if the price of polyester cannot be stabilized, the cash flow situation of manufacturers will not be stable in the future. Not optimistic. In addition, the intention of downstream weaving manufacturers to stock up before the holiday is not high. In the absence of positive market stimulation after the holiday, downstream demand is expected to lack motivation for bulk purchases. The improvement of profit margins in the polyester market still requires a boost in production and sales and a boost in price. <br /