Since the beginning of this year, the trend of international oil prices has been full of twists and turns.
At the beginning of March this year, WTI crude oil prices increased from 90 The U.S. dollar / rose rapidly under the barrel, reaching 110.15 in one fell swoopThe U.S. dollar/ barrels, and then quickly fell back to 85USD/ barrels, in half a month Completed a wave of ups and downs. Then, WTI crude oil prices fluctuated and climbed until 6 months8 span>Daily hit a record high of 118.08USD/ barrels. Since then, WTI crude oil prices began to turn downward, and fell below again 8 months later. span>90USD/ barrel mark, returning to 2month15 levels around the day.
After the outbreak in Europe and the United States, massive bond issuance and money printing caused excess monetary liquidity, generated inflation, and raised the prices of commodities including crude oil. After the Russo-Ukrainian war, international oil prices continued to rise, driving up the price of polyester raw materials. However, the price of polyester raw materials has increased, but the price of cloth has not risen. Some customers have even lowered prices. As a result, fabric profits have shrunk. Textile workers even joke that they work for free for oil tycoons.
Now that the oil price has returned to half a year ago, will the price of raw materials be cheaper?
Let’s first take a look at the trend of polyester raw material prices in the past six months. As can be seen from the figure below, while crude oil prices fluctuate, polyester raw materials also fluctuate, PTA, MEG, The overall trend of polyester filament is basically similar, but relatively speaking, polyester prices are relatively stable, PTA performs more strongly, and MEGMEGMEG The performance of span> is very weak.
Of course, for weaving companies, polyester yarn is cheap. Since weaving fabrics are made of silk, it is impossible to directly use PTA.
In general, when the price of gray fabrics is difficult to rise with the price of raw materials, lower raw material prices will be of greater benefit to textile companies. Although it may cause the value of the gray fabric in stock to drop, it is the lesser of two evils. At least lower raw material prices can lower the company’s operating costs and reduce financial pressure. Moreover, the current textile market is so huge that the competition for cloth that can be turned into inventory is generally very fierce. Do you want to “reduce inventory” by “raising prices”? Competitors will snatch orders away at lower prices or even at a loss.
Future oil price trends
In the next period of time, the biggest impact on the trend of crude oil will be crude oil supply, interest rate hikes by the Federal Reserve, and future economic expectations. Among them, the next time the Federal Reserve raises interest rates is expected to be in September, and the extent of the rate increase requires attention to U.S. inflation data, which may have little impact in a short period of time; in terms of future economic expectations, weak macro data and the raging global new crown epidemic The overall background makes it unlikely that the economy will recover in the short term, and the downward pressure on international oil prices is huge; in terms of crude oil supply, the situation has been basically stable since the Russia-Ukraine war. There has been progress on the Iranian nuclear issue, but negotiations in this area are a long-term one. Due to the tug-of-war, some insiders believe that the next oil price fluctuations may be even greater than the pendulum.
To sum up, the overall trend of oil prices in the future is downward, but there may be significant fluctuations in the short term.
The greater risk lies in demand
As far as textile people are concerned, what they are lacking now is not production capacity, but funds and demand. The most lacking thing is confidence.
my country’s textile production capacity is huge and cannot be absorbed by the domestic market alone. It must rely heavily on foreign trade. But with regard to the current economic situation overseas, except for some energy countries, even Japan��Manufacturing powers like Germany have begun to run trade deficits.
Of course, in terms of total volume, my country’s textile exports have declined instead of increasing. This is mainly because it has taken over some of the production capacity in Europe, the United States, Japan and South Korea that cannot be shipped due to the impact of the epidemic. These production capacities have high added value, but only a small part Leading companies can take over, but from the perspective of conventional bulk goods, they will not increase but decrease.
In the long run, this is naturally a good thing. The added value is higher and the industry is upgraded. But in the short term, conventional production capacity accounts for the majority of the market, and it also affects the most companies and the most jobs. This is not only the case in the textile industry, but also in almost the entire traditional manufacturing industry. This has caused many ordinary workers to start saving money again and not dare to spend, and domestic demand has tightened to a certain extent.
Editor’s note: Oil prices have fallen back to half a year ago, and raw material prices have also fallen. The weak economic environment cannot be reversed in a short period of time. For textile enterprises, the days of endurance are far from over.
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