Orders skyrocketed! The price of chemicals keeps rising!

Recently, the textile industry has become a social hot spot. Some reporters visited textile and garment production bases in Jiangsu, Shandong, Guangdong and other places and found that the order status of most companies has improved significantly compared with the first half of the year, and some companies' orders have surged.

Since September, many large-scale export textile companies in India have been unable to guarantee normal delivery due to the epidemic. Many orders originally produced in India have been transferred to China for production.

Public information shows that India is the world's largest cotton producer, the world's largest jute producer, and the world's second largest silk producer, with its yarn production capacity accounting for 22% of the world. In 2019, the size of the Indian textile and apparel market is around US$250 billion. The textile and apparel industry is also one of India's largest sources of foreign exchange income, accounting for about 15% of India's total export income.

As the epidemic cannot be effectively controlled for a long time, many factories in India have no way to start operations as scheduled, so more and more textile orders are cancelled or moved to other countries such as China.

According to Li Zhe, a textile and apparel analyst at a well-known domestic organization, the capacity utilization rate of some domestic enterprises reached about 80% in July and August, and it was already full in September. "Short-term factors are also the long National Day holiday this year, which caused the terminal Demand is driven; the traditional peak season for restocking before winter; the industry expects this year to be a cold winter."

The concentration of textile orders has directly driven the demand for upstream chemical fibers, dyes and other raw materials. The prices of viscose staple fiber, polyester filament, polyester staple fiber, and spandex have all recently increased to varying degrees.

Taking 1.2D×38mm (bright sewing thread) polyester staple fiber in East China as an example, the average market price of this product in September was about 5,600 CNY/ton, and the mainstream transaction price in the market since the beginning of October has reached 6,100 CNY/ton, an increase of 500 Yuan or 8.9%.

However, some experts believe that the market should look at the market outlook relatively rationally, especially in upstream chemical raw materials. For example, PTA and MEG currently have high inventories and are suppressed by new production capacity, which is relatively weaker than downstream products. In the case of doubts about the sustainability of the demand recovery, PTA, ethylene glycol, polyester staple fiber and other varieties may have limited room and time to rise.

Hundred price increase letters led the increase

Coming into November, nearly a hundred price increase letters once again covered the upstream and downstream of the industry chain, as if they were all working hard for the end of the year. Based on previous market news, some chemicals have even seen a pattern of 7 increases, and nearly 100 price increases have already flown! Covers chemical raw materials, rubber, cement, light chemical paper, etc.

With the successive release of price increase letters, many downstream manufacturers/distributors have slowed down their procurement. Today, the price of raw materials is rising at a rate that seems to have exceeded the rate of downstream shipments. If things go on like this, if transaction orders decrease, is the price increase letter equivalent to a piece of waste paper?

Listed companies rise to offset performance?

Prior to this, many companies issued performance announcements for the first three quarters, and many companies were in a state of declining profits. Among them are the giants BASF and Wanhua Chemical, which are often discussed by chemical professionals.

BASF's sales fell by 5% in the first three quarters due to the continued surplus of upstream chemicals and high profits in the materials business.

Wanhua Chemical, due to the impact of the epidemic on the main product MDI production, sales and price decline, net profit fell 5.349 billion yuan, a year-on-year decrease of 32.28%.

Now that the price increase letters are all issued, it seems that the entire industry is speeding up the last quarter of 2020 to rush the performance, and one after another is speculating.

The hydrogen peroxide has exceeded the highest price of 1,248 CNY/ton!

From the end of last weekend to the beginning of this week, prices in northern China stabilized after rising, and some in central China increased. As of October 27, the average market price of 27.5% hydrogen peroxide was 1370 CNY/ton, a 2.23% increase from last Friday. The current price has exceeded the highest price at the beginning of the year at 1,248 CNY/ton, an increase of 9.77%.

The installation stopped, butadiene soared by 20%!

On October 26, a number of butadiene plants were shut down, stimulating butadiene prices to rise. The average weekend price exceeded 8,000 CNY/ton, an increase of nearly 20%. The restart time of some devices (Shandong Weite and Shandong Huayu) is yet to be determined, but the current downstream trading atmosphere is sluggish, and the number of orders is small. It is expected that butadiene will remain high and stabilize in the short term.

Luxi Chemical is out of stock! DMF rose by another 150-1000 CNY/ton!

Since the beginning of this year, DMF has risen by 56%, and the price has exceeded 10,000 CNY/ton! According to market information, the supply of DMF is currently tight. Luxi Chemical has stopped quoting today without supply. However, the high price has caused downstream purchases on demand and resistance. However, the tight supply cannot be eased temporarily. It is expected that DMF will still have room for growth in the short term.

The sale is restricted and is expected to exceed 20,000 CNY/ton!

According to the summary of last week's data, the current offer for silicone has reached 19,000 CNY/ton. With the increase in downstream orders, the current trading atmosphere is good. It is expected that silicone will continue to rise in the short term, and it is expected to exceed the 20,000 mark.

remind! The ups and downs are unbalanced, so be cautious in purchasing and hoarding!

Although the market as a whole is on an upward trend, the upward trend is expected to continue into the first quarter of 2021. However, due to many adjustments in the past year, high raw material costs have crushed many downstream manufacturers and distributors.

Beginning in June, perhaps because of the pick-up in demand, or perhaps because Wanhua had lost too much before, it raised the price of its main product MDI several times, causing dissatisfaction in the downstream market. The successive increase in prices has discouraged downstream and traders. It's not that I don't want to buy it, but I really can't afford it.

Prices have risen one after another, and the resistance of downstream purchases has also risen. The continuously issued price increase letter is like a letter of persuasion, which makes downstream manufacturers wait and see and dare not make a move. If the market price is high for a long time, it may cause a new round of market price reshuffle. Now that there are signs of a second outbreak of the epidemic, it may affect demand. Please be rational when hoarding goods.