After the Spring Festival, while the COVID-19 epidemic continues, textile raw materials buck the market trend and rise.
1. According to feedback from some enterprises in Shandong, Hebei, Jiangsu and Zhejiang, since February 10th, less than In one month, domestic conventional yarn has increased by 200-400 yuan/ton, and individual high-end and high-count combed yarn has increased by nearly 1,000 yuan/ton.
2. According to quotations from polyester factories in Jiangsu and Zhejiang, starting from the 3rd, some mainstream polyester yarn manufacturers took the lead in raising prices. As of the 5th, some polyester yarn varieties had increased by 100-200 yuan. RMB/ton range.
The long-awaited price increase after the holiday is finally here, yes What causes it?
In late January, as the COVID-19 epidemic spread in China, the decline in China’s crude oil demand triggered a sharp decline in international crude oil prices. This, coupled with the increase in U.S. crude oil inventories, kept oil prices hovering at the bottom. . In the early stage, Saudi Arabia advocated OPEC+ and believed that the expansion of production cuts affected oil prices. The “suspense” of production cuts has affected the market. Boosted by positive news, international crude oil has bottomed out and rebounded.
Crude oil, as a crude oil product in the polyester market, has a cost-promoting effect on polyester products. While crude oil rebounds, entering the post-holiday period, the price of polyester filament is basically at a “low price”. “There is no market”, and this time, downstream traders are ready to take advantage of the low price to stock up, and shipments have improved slightly. Therefore, it is rare to seize the opportunity for speculation this time. The manufacturers immediately became uneasy and wanted to continue to increase prices. The fire started.
Can this market trend last?
1. The increase in inventory caused by the increase in operating rates has become a “stumbling block” to price increases
With the exception of Hubei Province across the country, The resumption of work and production outside the Wuhan and Wuhan areas has accelerated, the start-up rate of textile enterprises has gradually increased, and market supply has increased. On March 5, the person in charge of a medium-sized textile company in Dezhou, Shandong Province, introduced that the factory mainly produces carded 21S, 32S and combed 32S. The current production capacity has restored to about 50%. Due to transportation capacity and orders, the inventory of finished products is steadily increasing. middle.
Similarly, in February, polyester inventories continued to increase due to weak downstream demand, while the operating rate of polyester factories was also gradually increasing, and production capacity was restarted at the end of February. 2.1 million tons/year, with a new device capacity of 250,000 tons/year.
Among them, 7 sets of polyester filament units have been restarted one after another. At present, the operating rate of polyester filament units is 66.06%. The increase in inventory brought about by the increase in operating rates has become a “stumbling block” to price increases. In addition, in order to encourage enterprises to resume work and production and restore production capacity as soon as possible, the government has recently introduced a number of “tax exemption and fee reduction” policies, which have obvious effects. However, because the business and trade system has not yet been fully restored, enterprises that are resuming production quickly will suffer greater consequences.
2. Supply and demand are gradually saturated, and the rise in gray fabrics has temporarily come to an end
Since mid-to-late February, the prices of most gray fabrics have risen rapidly. According to feedback from traders in the Shengze area, due to the impact of the epidemic, the production capacity of weaving enterprises will be low after the new year, resulting in a shortage of some gray fabrics. Especially for some best-selling varieties, such as imitation silk, T400, etc., many traders have stocked up. Data show that since mid-February, most categories of gray fabrics have increased by 0.2-0.4 yuan/meter, and some have increased even higher. The rise in gray fabrics directly drives the rise in yarn prices. However, with the recent increase in gray fabric production capacity, supply and demand have gradually become saturated, and the increase in gray fabrics has been weak. Some weaving mills have even cut prices, which has put greater pressure on yarns.
In addition, although the polyester yarn market shipments have improved slightly recently, most of them are traders taking advantage of low prices to stock up, and the downstream weaving performance is average. Although the domestic epidemic has been effectively suppressed, the actual demand is still low due to insufficient raw material support and slow arrival of weaving factory workers. At the same time, weavers generally have the habit of stocking up before the Spring Festival, and the average raw material inventory that companies can produce still exceeds half a month. Therefore, the market mentality is at a loss during the epidemic. Most of the middle and lower reaches are basically waiting and watching. It is difficult to have a supportive mentality and the market volume is basically small. For this reason, the weaving market has a wait-and-see attitude when purchasing raw materials. Manufacturers say that the market is still unclear and they maintain a wait-and-see mentality. Lord.
3. Lack of orders is the biggest resistance to rising
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The textile market is still determined by terminal orders. There is a lack of terminal orders and procurement efforts cannot keep up. The current prosperity and price increases in the textile market may be short-lived.
As the largest first-level clothing wholesale markets in China, Guangzhou Sanxing and Sijiqing are currently closed due to the impact of the epidemic. It is reported that Guangzhou Thirteen Banks, Hangzhou Sijiqing, etc. have not yet recovered normally. The delay of more than 20 days has reduced the sales opportunity of the spring model by one-third. “Even if the market opens, there won’t be many people coming to buy goods for the time being. It seems that we have to be prepared for one less season of business this year.” A clothing store owner said.
From a consumer perspective, when the epidemic is over, many people’s consumption concepts will also change. Although clothing is a necessity, in the face of the epidemic, wearing it seems to have become It’s not that important anymore. Safety needs come first, such as masks and disinfectants.�� and spending on food is increasing. As one goes and the other goes, consumption of clothing may not recover for a long time.
Furthermore, South Korea has recently entered a state of high alert, and the epidemic in Europe has also worsened. Consumer demand in these regions will also change, which will also affect the orders received by foreign trade companies.
According to many traders in Shandong, Hebei and other places, the increase in yarn prices some time ago was mostly a “empty increase”, and the actual transactions were very few. Recently, the orders received by textile companies have been very unsatisfactory. Large factories still have a small number of new orders, while small factories have almost no chance of receiving new orders. At the same time, affected by the global spread of the epidemic, international and domestic cotton prices have fluctuated sharply, which has also made companies lose reference for yarn quotations. On March 5, as the global epidemic intensified, terminal consumption was deeply hit. Many international orders were canceled and contracts were broken. It is expected that the number of orders received by textile companies will continue to decrease in the near future.
4. The “OPEC+” negotiations completely failed, and crude oil futures fell sharply
On the other hand, the oil price and production reduction agreement that everyone expected has changed. Because Russia refused to accept the deepening production reduction agreement proposed by OPEC, this “OPEC+” negotiation completely failed. In response to Russia’s decision, OPEC announced that it would completely cancel the agreement. Due to the limitations of its own production, the oil market lost control and entered a disorderly stage. Panic spread rapidly. International crude oil suffered a crazy sell-off. European and American crude oil futures prices fell sharply. On March 6, WTI April crude oil futures closed down $4.62. , a drop of 10.07%, the largest one-day drop since November 2014, to US$41.28/barrel, which was the lowest closing price since August 3, 2016.
Brent May crude oil futures closed down $4.72, or 9.44%, at $45.27 per barrel, hitting the lowest since June 22, 2017. Some analysts commented that if the new coronavirus epidemic breaks through the long-term stable bottom of crude oil prices, then the breakdown of this production reduction negotiation will lead to a new round of crude oil price crisis.
In summary, although domestic textile companies have quickly resumed work, due to low orders and high inventory pressure, most Textile factories are unable to reach full production capacity and supply exceeds demand. Any delay in the resumption of work will affect the resumption progress of the entire industrial chain. As the national epidemic control is gradually relaxed, the recovery speed of the polyester market will also accelerate. However, as international crude oil has once again turned from optimism to pessimism, it is difficult to boost short-term market prices. It is expected that destocking will still be the main focus in early March, and that by the end of March The market may improve. </p
