On Tuesday (August 30), international oil prices plummeted by 5%. On Wednesday (August 31) and Thursday (September 1), international oil prices also fell by more than 2%, and the cumulative decline in three days exceeded 10%.
What caused the sudden sharp drop in crude oil? Is now a good time for textile people to buy raw materials?
The Federal Reserve continues to aggressively raise interest rates
On August 30, local time, John Williams, President of the Federal Reserve Bank of New York, said that he expected the Federal Reserve to raise interest rates this year and maintain interest rates at that level until inflation is suppressed.
He said Fed policymakers remain focused on getting inflation closer to their 2% target.
Inflation in the United States reached 8.5% in July, which is far from the target of 2%. Therefore, if you want to achieve this target, you will inevitably continue the strategy of aggressive interest rate hikes in the future. The current drop in oil prices has only released the negative news in advance. .
Of course, it is difficult for the price of crude oil to continue to fall. The oil-producing countries have formed a relatively tight “offensive and defensive alliance”. Low oil prices are not in their interests. Once crude oil falls to a certain level, they are likely to Release news of production cuts to boost oil prices.
The US dollar is strong and the RMB falls below 6.9
Recently, the RMB exchange rate has exceeded 6.9, which has attracted widespread attention from textile people, especially those engaged in foreign trade. The exchange rate is closely related to them.
From January 1 to August 30, the US dollar appreciated against the RMB by 8.32%, which is close to 10% compared with the highest point during the year. It is indeed a considerable depreciation, but this is not because the RMB is not strong. It is the sequelae of the Federal Reserve’s interest rate hike, and other mainstream currencies have depreciated more.
- The euro has exceeded 1:1 against the US dollar, and the US dollar has appreciated relative to 13.7%;
- The pound also hit a two-and-a-half-year low against the U.S. dollar, with the U.S. dollar appreciating 15.25% relative to the dollar;
- The exchange rate of the Japanese yen against the U.S. dollar almost exceeded 140, which is the lowest in 24 years. The U.S. dollar has relatively appreciated by 20.34% (PS5 has also increased in price as a result)…
Among the world’s major currencies, only the ruble has appreciated relative to the US dollar because it is anchored to energy.
The Federal Reserve is raising interest rates, while China is cutting interest rates in order to release liquidity. As a result, it is normal for the exchange rate to decline. However, although this can promote exports, it may offset the decline in crude oil.
Should textile companies buy polyester?
Although the price of crude oil is falling, the price of PTA has not fallen sharply, and the price of polyester filament has basically remained stable. As the high temperature finally left, the electricity consumption situation was no longer tense, and both the operating rate of looms and the operating rate of polyester showed a significant recovery.
The polyester operating rate has rebounded to around 82%.
However, judging from what we have learned, weaving companies are currently adopting a conservative approach to purchasing raw materials, and downstream garment companies are also conservative in placing orders. Once demand is concentrated, due to the lack of buffers, the market may overheat in a short period of time, resulting in a boom. scene.
If this situation occurs, weaving factories may have a large demand for replenishment in a short period of time, so raw material prices may rise as a result.
Overall, in the next one or two months, the possibility of polyester price increases is higher than the possibility of price decreases.
The factory has reopened and is recruiting workers soon
In the first half of the year, due to sluggish business, high temperatures and other reasons, some factories reduced their operating rates to very low levels. But when you want to start work, you may encounter a shortage of workers.
Recently, the editor saw a picture on a forum in Jiaxing. The content is a recruitment advertisement in Jiaxing’s talent market. It includes positions in various factories, divided into long-day shifts and double shifts. Most of them are double shifts, with a maximum monthly salary of 7,000. +, the lowest customer service is 3500+ and generally around 6000!
Among them, there are also recruitment content for textile factories and chemical fiber factories. The working hours are two shifts and the monthly salary is 6,000+, but the work intensity is not small. Boss Youbu reported that due to the high temperature, many companies had holidays, and some workers came out to look for work because they were out of work. There is not much shortage of workers.
Afterwords
In the short term, the sharp drop in crude oil may cause raw material prices to weaken, but the number of orders on the market did increase in September compared with August, and the fundamentals have improved. However, when it comes to buying raw materials, textile companies still act within their capabilities. No matter what decisions they make in the past two years, they all aim to survive.
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