After falling for many consecutive weeks, PTA and polyester filament started a new round of price increases this week. Although the increase is not large, it is also a good news for the market. A wave of new vitality has been injected, and the source of this increase starts with an order for 130 million meters of polyester taffeta.
130 million rare “huge” order, demand is still hype
Last weekend, in the circle of friends News suddenly came out that there was a super order of 130 million meters of 210T polyester taffeta on the market. On April 30, Beijing time, the number of confirmed cases of COVID-19 worldwide has exceeded 3 million, and the number of confirmed cases in the United States has also exceeded 1 million. The global epidemic is spreading so fiercely, and the demand for anti-epidemic items, mainly masks and protective clothing, is growing rapidly. However, limited by the production capacity of meltblown fabrics and non-woven fabrics, everyone has turned their attention to traditional pongee and polyester taffeta. .
After some research, the editor found that 210T polyester taffeta can indeed be used as protective clothing after special coating and finishing, but the protection The level is slightly lower than that of traditional non-woven protective clothing, but now the whole world is in short supply of epidemic prevention materials. Protective clothing made of pongee and polyester taffeta are always much more effective than those made by medical staff using garbage bags.
But there is another one on the market The voice said that this order is hot money speculation. Although the demand for epidemic prevention supplies is indeed huge, there are still doubts about whether foreign countries can accept non-woven protective clothing. The majority of this order has been divided up by several large weaving factories, and it is difficult for the small weaving factories that are most difficult to operate to get a share of the pie. Therefore, some people are worried that polyester taffeta and pongee will become the next targets of speculation, and prices will be artificially high in a short period of time. However, when the hot money “makes a fortune” and escapes, what will be left in the weaving market is “a piece of chicken feathers.” “.
Rising! Just go up hard!
Whether it is hype or there is real demand, the price of polyester products has indeed gone up. With international oil prices plummeting, the epidemic continuing to spread, and large clothing brands reporting sharp declines in revenue in the first quarter, the prices of polyester products have risen like this. The reasons for this are worth pondering.
The first is the issue of expectations. The previous textile market can almost be described as “a pool of stagnant water”. Domestic and foreign trade orders were insufficient, weaving companies could not receive orders, and inventories were getting higher and higher. The rate is getting lower and lower, and polyester production and sales maintain 3-40%. Both the upstream and downstream of the industrial chain have no hope and can only mechanically purchase, produce, and accumulate inventory. The market needs a little confidence to boost it, and this time’s 130 million polyester taffeta order, because of its huge quantity and popular products, most cloth bosses saw the opportunity to get a share of the pie. And this is indeed the case. In this wave of market conditions, some weaving companies have actually removed some 210T polyester taffeta stocks, which has brought back a wave of blood. Seeing that there is demand in the market, weaving companies will naturally shift their production focus to a certain extent. After all, they are all producing stocks of conventional products, so there is nothing they can do.
The second is the inventory problem, right now Judging from the situation, the inventory of both polyester filament and gray fabric is at a very high level.
In terms of polyester factory polyester inventory, according to the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated in 26-36 days; in terms of specific products, POY inventory By 19-25 days, FDY inventory has been around 20-26 days, while DTY inventory has been around 27-37 days, among which POY and FDY stocks have dropped more obviously.
grey fabric inventory, as of April 30 According to the statistics, the average inventory of gray fabrics in weaving enterprises in Jiangsu and Zhejiang is close to 43 days. Although it is still at a high level, under the current market conditions, the inventory has decreased compared with last week, which is no small achievement in itself.
It is because all links in the industry chain are plagued by high inventories, so as long as the hype helps all parties destock, it is beneficial and everyone will be willing to do it. This is indeed the case. After this wave of market conditions, the inventories of weaving companies and polyester factories have decreased slightly.
Inventory is not valuable, money is valuable
There has been a lot of bad news in the clothing industry recently. One is that 80,000 employees of GAP were “furloughed” and their wages were suspended. The other is that Adidas’s net profit plummeted 96% in the first quarter and closed 70% of its stores. These well-known and well-known clothing companies All brands have suffered serious business crises due to the epidemic.
These news and the constantly refreshing epidemic numbers also constantly remind us that demand is far from recovering and victory is still far away.
For weaving companies, the price of gray fabrics has been falling since last year. Taking 210T polyester taffeta as an example, the market was not good in 2019 The price at that time was 1.2-1.3 yuan/meter, but now after a wave of speculation, the price is still only about 1 yuan/meter. It can be seen that the price of polyester taffeta last year, even if it was slightly lower than the cost price, was higher than this year.
At the same time, after investigation, we also found that most weaving companies currently have a large amount of inventory, which is close to the highest level in history. It can be seen that even if demand improves slightly in the future, the high inventory of weaving companies will still suppress cloth prices, so for a long time, the cloth in stock will be worthless.
On the other hand, in order to maintain production, Weaving companies have to spend a lot of money every month. In the absence of orders, it is almost a situation where they can only get out but not get in. The worse the market situation, the longer it will take for customers to pay back their money, and the greater the risk. Once the capital chain is broken, inventory can only be disposed of at a lower price. Therefore, whether a company can sustain it ultimately depends on whether it has enough funds on hand to sustain it until the market improves. In a situation of overcapacity, money is the most valuable.
Postscript
This week, the order for 130 million meters of polyester taffeta was like a thunder on the ground, causing the textile market, which is now like a stagnant water, to stir again. There may be some hype in this. However, because the market has been silent for too long, the chain reaction will eventually be far greater than the order itself. However, on the other hand, the global epidemic is far from being controlled, and it is unknown when the demand for clothing will recover. In the next period of time, it will be time to test the “internal strength” of textile companies.
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