Economist says: This week is a moment to witness history!
The textile boss said: There are unforeseen circumstances!
The general public says: The era is coming when water is more expensive than oil!
COVID-19 and crude oil turmoil The “combination punch” stunned the newly recovered textile market.
The cause of the story is the breakdown of the “OPEC+” (OPEC and its allies) production reduction negotiations. Last Saturday, Saudi Arabia announced a significant reduction in the price of crude oil sold to Europe, the Far East and the United States. The largest in more than 20 years.
March 9, International oil prices hit their biggest one-day drop in the past 30 years, dragging down U.S. stocks to plummet after the opening. The three major stock indexes triggered circuit breakers for the second time in the history of U.S. stocks. The global market is experiencing a “blood collapse”.
On March 12, Asia-Pacific stock markets fell across the board, and U.S. stocks, European stock index futures have plummeted, with Nasdaq futures triggering a circuit breaker.
After oil prices collapsed, global capital markets also collapsed. Circuit breakers twice a week undoubtedly caused panic in the market.
This week, during the visit, the editor found that many textile bosses were panicked: on the one hand, they were saddened by the depreciation of raw materials, and on the other hand, the inventory of finished products that had not been cleared was also devalued. , My flesh aches!
The market is all green and market prices fluctuate significantly!
The start of the oil price war will inevitably cause significant fluctuations in market prices, especially in the face of the recent oversold WTI crude oil futures quotations, which has led to the entire Prices in the polyester industry chain continue to drop.
According to data monitoring from China Silk City Network, the price of polyester filament fell this week; as of Friday, mainstream manufacturers of POY 75D/36F quoted prices around 6900-7000 yuan/ton, while FDY 50D /24F product quotations have stabilized at around 7,900-8,000 yuan/ton, which has dropped by 200-300 yuan/ton compared with last week. The cumulative decline in these two weeks has reached 600-700 yuan/ton.
Bulk Textiles Raw materials have all fallen, which has also suppressed prices in the fabric market. Under such circumstances, many customers have lowered prices to fabric vendors, and market quotations have become chaotic.
Trading in Wujiang area Mr. Wang said that the recent market quotations have been chaotic, customers have severely suppressed prices, and the prices have been close to the lowest price in recent years. Taking conventional 75D glossy satin as an example, the price in 2018 was around 2.70 yuan/meter, and now it is quoted at 2.10 yuan/meter.
The person in charge of a manufacturer of polyester taffeta lining on the market also said that it has taken the initiative to reduce prices recently. The current price of 210T polyester taffeta is 1.40 yuan/meter, which has dropped from last week. There is 0.10 yuan/meter.
Mr. Chen, another man who trades in imitation silk, said that the price of polyester yarn has dropped by 500 yuan/ton recently, and that of gray fabric has also dropped a lot. More than 4 yuan, which is a price that has not appeared in recent years.
Price reduction and price reduction have become the main tasks of manufacturers recently. The decline in raw materials has made it more difficult for the textile market, which was already sluggish in receiving orders, to receive orders. Many textile bosses said that there was a significant decrease in orders this week, market prices are unstable, and customers are afraid to make purchases at will.
Profits fell to the bottom, and Boss Bu said: Dare not produce, don’t Dare to sell cloth!
2019 did not leave many good memories for the textile market, except for a pile of inventory. As a result, weaving manufacturers after resuming work are carrying a mountain of “inventory”. Although after the beginning of the new year, most manufacturers have more or less destocked operations because they are rushing to make new year’s orders. However, as the execution of new year’s orders comes to an end, new orders are not followed up enough, and manufacturers’ inventory withdrawals begin to slow down.
According to the sample companies monitored by China Silk City Network, the current inventory of gray fabrics in Shengze has been maintained at the 38-day level this week and is difficult to decline. If new orders continue to not improve, the inventory has reached exhaustion. The inflection point of the library.
Nowadays, the crazy depreciation of raw materials has also caused the inventory of weaving factories to depreciate. After all, the prices of raw materials used to be higher than the current price were used for production. A company specializing in pongee and polyester taffetaThe person in charge of the manufacturer said that the current market situation is not good, and the plummeting price of raw materials has a greater impact on profits. He explained that the factory currently has about 40 days of gray cloth inventory, which was produced a year ago and was almost more than 4 million meters. At that time, the price of raw materials was relatively stable, but the current price of gray cloth has dropped by 0.10 yuan/meter, and this batch of inventory has directly depreciated. 400000.
A textile boss who runs a factory in Jiangxi said that he currently does not dare to increase the operating rate for fear of losing one meter for every meter of production. “I haven’t received any orders since the beginning of this year. At present, I just want to clear the inventory quickly and don’t dare to produce more. Due to the global spread of the epidemic, the lack of orders, and the accumulation of inventory can easily cause inventory depreciation and capital backlog.”
Compared with the start-up load in recent years, the start-up load one month after the resumption of work in 2020 is obviously low. According to monitoring data from China Silk City Network, the current start-up load in Shengze area has recovered to 70-80%; in Changxing area it has recovered to 60% – around 70%; the Xiaoshao area is on the low side, at around 60%; compared with the same period last year, construction starts increased slowly.
Global epidemic Spread, sounding foreign trade alarm!
Depreciation of raw materials, difficulty in destocking, and sharp decline in profits have become the “thorns” in the hearts of textile bosses. For them, these pressures can only be relieved if demand recovers as quickly as possible. Judging from the feedback from the companies visited, the new orders of most companies can be said to be “clear soup with little water”, which cannot be compared with the lively scenes of the “Golden Three” in previous years.
First, the epidemic broke out in China in February, which delayed the recovery of the domestic trade market. Then, the global epidemic broke out in March, causing overseas orders to also be affected. Some textile companies have already been affected by the epidemic in the countries where their customers are located. Seriously, cancel the order.
Some foreign trade companies said that orders from Italy and 300,000 meters of orders from South Korea were cancelled. Facts have proved that the current textile companies are “internal and external troubles.”
“The current epidemic has a relatively large impact on foreign trade orders, because we have had a lot of foreign trade orders in recent years. Now many countries have reduced or canceled orders due to the epidemic. We still have to look at the pneumonia epidemic later. But I feel that after the epidemic is over, the market will remain the same and it will take time to recover.” said Mr. Wang, a foreign trade boss.
Many textile bosses also said that it is difficult to make a good breakthrough in the market in the first half of the year, especially in the foreign trade market. After all, many domestic trading companies’ final customers are abroad, so it is easy to intercept traffic at the terminal. As a result, both domestic demand and foreign trade have been poor. This year’s “gold, three and no gold” situation is already a certainty!
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