Last week, against the background of the frequent emergence of various influencing factors, crude oil prices showed an unusually strong pattern. Crude oil prices have also risen from a low of US$77/barrel at the beginning of the week to a maximum of US$83/barrel, with the largest single-week increase of nearly US$6/barrel.
Geopolitics pushed up oil prices, with crude oil once again reaching 80 yuan/barrel. Under this influence, PTA prices have continued to rise. Since December 21 last year, there has been a remarkable rise, rising from 4,535 yuan/ton to 5,205 yuan/ton, an increase of 14.77%.
Upstream raw material prices have continued to rise, and downstream polyester manufacturers have to follow suit. Polyester filament has also experienced a long-awaited price increase. Since December 21, POY150D has increased from 6975 yuan/ton to 7520 yuan/ton, an increase of 7.53%; DTY150D has increased from 8550 yuan/ton to 9100 yuan/ton, an increase of 6.43%; FDY150D has increased from 7200 yuan/ton / ton rose to 7,700 yuan / ton, an increase of 6.94%.
Now the market is more concerned about whether there will be a new atmosphere in the new year and whether the textile market will have sufficient orders to continue in the new year to continue the rise of polyester raw materials.
01U.S. oil is expected to exceed US$100 per barrel
The polyester industry chain is booming. This scene seems to be still vivid in our minds. Yes, that is the “Silver Ten” in 2021. Let’s look at it specifically. In 2021, international crude oil exceeded US$80/barrel for the first time in early October, and then polyester products such as PTA and polyester filament reached their highest point. Blackstone Group predicts that U.S. oil is expected to exceed US$100 per barrel in 2022. If international crude oil continues to maintain its upward trend, it is imperative for polyester products to follow suit. From this we infer that under the crazy rise in oil prices, polyester products may reach new highs again.
02Downstream market orders pick up
The polyester market in October was able to maintain a one-month upward trend. One of the important reasons is that it coincided with the traditional peak season. Only with the sharp rise in crude oil and the peak season for downstream orders, can the polyester market have such a strong confidence in price increases. Then the same price increase conditions have appeared again now. It is just before the Spring Festival holiday, crude oil has returned to 80 US dollars per barrel, the downstream market has ushered in a “closed door”, and orders have been released again. These conditions will provide strong support for the continuation of the rise in polyester raw materials.
03Downstream production is restricted or restarted
The polyester market continued to rise in October, and the most important reason is production restriction! In October, the textile industry ushered in a large-scale production restriction. From polyester factories to weaving factories, printing and dyeing plants and finishing plants, the entire manufacturing industry has varying degrees of production restrictions. Under the influence of production restrictions, prices in each environment have increased to varying degrees. Throughout the past few years in the textile industry, industry production restrictions have led to price increases. Now, production restrictions have appeared again. It is understood that last week, some water spray companies and post-finishing companies faced production restrictions and suspensions. At the end of the year, when orders are picking up and delivery deadlines are tight, we are once again facing limited production suspensions, which will have a huge impact on the entire market. Especially with the correction of polyester products and limited production capacity, weaving manufacturers have more confidence to increase the price of gray fabrics.
Of course, the rise in the polyester market also depends on whether downstream orders can continue. However, the downstream market has unexpectedly improved recently. Printing and dyeing factories are bursting out of stock, traders are rushing to order, and everything is booming. The last time the market had a “closed door” was in late 2019 and early 2020, and that “closed door” market lasted until April 2020. Taking this as a reference, the current wave of orders may last until the “Gold Three Silver Four”. There are also rumors that the water spraying and finishing plant’s production suspension may last for a long time. Once the news is true, the possibility of a delay in the order wave will further increase.
Regarding the prediction that oil prices will exceed 100 US dollars per barrel, industry insiders revealed that in fact, not only Blackstone is bullish on oil prices, but investment banks such as Goldman Sachs and Morgan Stanley have begun to stand up and be bullish again because oil prices have once again reached the top. It reached US$80/barrel, which gave the market room for imagination. While there is no shortage of orders and crude oil continues to rise, the price of polyester raw materials is likely to rise further in the future.
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