Tense Situation In Iran, International Oil Prices "Broken 70", Polyester Raw Materials Rose 2%!

On January 3, 2020, Qasim Souleymane, commander of the "Holy City Brigade" of Iran, was killed by the US military UAV surprise attack. The global financial market shook and Brent crude futures rose 3.5%.

Domestic crude oil futures also continued to rise. Following the 3.72% rise last Friday, this Monday (January 6th) early morning crude oil rose nearly 6%, the impact of the daily limit, the highest price of 516 yuan / barrel.

Affected by the rise in crude oil, the products in the polyester industry chain also rose sharply in January 6th.

PTA futures, PTA futures 2005 contract closed at 15 o'clock on January 6th 5098 points, compared with the previous trading day rose 104 points, or 2.08%.

Ethylene glycol futures, ethylene glycol futures main contract 2005 closed on January 6th, 4753 points, compared with the previous trading day rose 110 points, or 2.37%.

In terms of polyester filament, FDY of a factory in Wujiang increased by 50-100 on Saturday, depending on the quantity. A factory in Wuxi rose by 50 on Saturday, and the DTY part of a factory in Zhejiang rose by 50, which is basically at a steady and rising trend. FDY

Geopolitics is a very important factor in international oil prices. When Saudi Arabia's two oil installations were bombed in September 14, 2019, Brent crude oil futures surged 20% in a day. The earlier Gulf War and the Iraq war also made international oil prices rise sharply over a period of time. Crude oil, as the most raw material of polyester products, the price changes directly affect the cost and price of polyester products. The US Iraq conflict will affect the development of polyester raw materials, no matter what the future development will be.

Polyester raw material has gone up, but it is not up to date.

But compared with the price rise of polyester raw materials, the production and marketing situation of polyester factories is not ideal. Why?

Rise, but do you have money to buy?

At the end of last year's market research, most weaving companies said that the factory's holiday time will be around New Year's day. As a result, new year's day has passed, and some weaving enterprises have begun to take off. Workers have already returned home and have missed the best time to purchase raw materials.

Of course, even if the holiday has been made, weaving enterprises can pre purchase raw materials next year by means of super signing, etc. Here we will talk about why the weaving enterprises have to leave so early. Why is it so early? It's not because there is no money.

For weaving enterprises, there are two very serious problems before the Spring Festival, one is excessive inventory of grey cloth, the other is difficult to receive receivables. Excessive inventory of grey cloth precipitates a large amount of capital in enterprises, and the hard receivable receivable makes the money received by instinct become "invisible and invisible", which together greatly reduces the liquidity of weaving enterprises.

Generally speaking, the earlier financial pressure is, the greater the financial pressure will be faced by enterprises. This is a vicious circle, so they are unlikely to afford enough money to buy raw materials at this time.

"Buying up" is no longer popular, and wait-and-see becomes a new choice.

Besides having no money, there are still some good weaving enterprises that are choosing to wait and see. This year, the market is not as good as expected. For example, the experience of "buying up, not buying or falling" has lost utility this year.

In fact, for most of the weaving enterprises, in the past month, the action of raw material preparation has been carried out continuously. At this time, it has basically come to an end.

According to this year's market, a large part of weaving enterprises are unable to store too much raw materials in years ago, which leads to the problem of stock in polyester factories at the end of this year. Under the suppression of inventory, the price of polyester filament is difficult to rise significantly.

Once favorable air strikes are made, the price of raw materials that can not easily rise will fall again. Under such circumstances, keeping a wait-and-see attitude, and maintaining a small stock of raw materials according to the original plan with the purchase is probably the best choice at this stage.

How does the US Iraq conflict affect geometry?

Geopolitical problems are related to the game between several countries, and no one can predict accurately before the final result has come out.

If the conflict between the US and Iraq intensifies, international oil prices will continue to rise, driving up the price of polyester raw materials. For weaving enterprises, although it is necessary to spend more money on raw materials, on the other hand, the cloth becomes more valuable than before. In the short term, it may increase the pressure of weaving enterprises' production and operation, and make their capital chain more tense, but in the long run, it is a good news.

If the "Thunderstorm" and "raindrop" are finally between us and Iraq, international oil prices will fall back to their original point, and polyester raw materials will also fall again. For weaving enterprises, this is nothing more than a new "wolf coming" story. However, on the other hand, the right to speak of polyester raw materials prices for polyester raw materials has been gradually eroded in this time of "wolf coming". Whether the market will improve next year will ultimately depend on whether demand can be boosted.