In recent days, whether under the impact of overseas epidemics or the pressure of Sino-US trade, many people in the industry have been very confused about the development prospects of the entire industry. In the eyes of many people, domestic textile companies are working for workers recently, so there are tragic voices saying “get through it, get through it”.
From the perspective of the development of the entire textile industry, upstream raw material companies are basically privately owned in the industrial chain. and state-owned enterprises are the main ones, while raw material companies are all giants in the industry such as Hengli, Hengyi, Tongkun, Rongsheng and so on. Continuous price increases by upstream raw material companies have led to continued increases in the production costs of polyester companies. Polyester companies were already prepared for price increases, but downstream companies did not buy it, creating an embarrassing dilemma for the entire industry.
With success and confidence returning, high-inventory polyester manufacturers finally breathed a sigh of relief
Crude oil has been slowly rising in recent months, driving support for the entire polyester raw material. Boosted by rising crude oil prices, it has given a greater impetus to the polyester raw material product market. The PTA and ethylene glycol markets have picked up, which in turn has pushed up polyester yarn prices.
In August, the polyester market, which has continued to be sluggish, finally ushered in better performance. In addition to the slight increase in prices, production and sales are the best proof. The average production and sales of mainstream manufacturers increased from less than 40% in the early stage to 60-80%. Even during the period of sharp rise in oil prices, the market price exceeded 100. The inventory of polyester manufacturers The pressure has once again shifted to downstream production companies. According to an industry insider, some major manufacturers have said that they may reduce discounts or even increase prices in the future, which to a certain extent has also led to a bargain-hunting mentality in the downstream market.
At the same time, despite the lack of orders in the textile market in the first half of the year, good news finally came in late July. According to data, the transaction atmosphere in the Jiangsu and Zhejiang markets has improved recently compared with the previous period. The transactions are mostly concentrated in autumn and winter fabrics. Both the domestic trade and foreign trade markets have performed to a certain extent, especially the domestic trade market. Among them, the elasticity performance is better, and the orders for other conventional autumn and winter fabrics are also better than the previous period, such as Shumei silk, gallbladder, etc. used for lining, warp knitted suede, velvet, etc. used for sofas. In addition, medium-thickness Type clothing fabrics also perform to a certain extent, especially when they are used to make down jackets, cotton jackets and other fabrics after special finishing processes. Market proofing and test samples perform well.
Since entering the off-season, downstream weaving manufacturers have been cautious about purchasing raw materials and dare not put funds into raw materials at will. Moreover, there are not much raw materials purchased in the early stage. In addition to the current partial placement of terminal orders, during visits and surveys, most weaving manufacturers have begun to slow down the increase in gray fabric inventories or have been able to level off production and sales. The inventories of a few manufacturers producing marketable products have even dropped slightly, which has also boosted market participants’ sentiment. confidence. So this led to this wave of market conditions. This wave of purchases has indeed given a sigh of relief to polyester manufacturers who originally had high inventories!
The market has turned around in just one week! The startup rate is reduced from 100% to 50%, and all machines are stopped waiting for work to be done! The textile market is stuck in the off-season quagmire again!
However, less than a week later, it was suddenly reported that there was a serious shortage of orders in some markets and production was no longer sustainable.
1. Lack of orders, printing returns to off-season
Although traditional The printing peak season in September and October has not yet arrived, but judging from the recent performance of the printing market, it is very likely that this wave of market has been overdrawn in advance, and it is already a luxury to talk about the peak season in the future. A big factor in this situation is the continued postponement of sales of finished clothing.
“Recently, we have an order for two thousand meters in a printing factory. The gray fabric came into the warehouse last week. We waited in line for three days for production and it was just printed recently. I was originally going to have it finalized and shipped today, so I called the salesperson and asked him to help line up a queue to get ready for finalization. Who knew that the factory was no longer busy now, and all four finalization machines were parked there, waiting for customers to bring fabrics. There is no need to queue up for finalizing, and even the ten printing machines are not fully operational, only 5-6 are running.” said a fabric trader.
As we all know, printed fabrics are mainly used in spring and summer clothing, while the main function of winter clothing is still to keep warm. Although fashion and popular concepts have begun to awaken in recent years, in a short time It is difficult to “let a hundred flowers bloom” like spring and summer clothing. The peak season in September and October is mainly for the production of autumn and winter clothing. Winter clothing does not use many printing elements, but what about autumn clothing?
Autumn clothing may have driven the printing market into the peak season in previous years, but this year it is obviously difficult to do so. This spring, the entire sales season was missed due to the epidemic, and a large number of clothing company warehouses were filled with spring clothing inventory. Some of them change some spring clothes into autumn clothes for sale, or simply resell them as they are, which leads to a significant reduction in demand for autumn clothes.
What’s more important is that some clothing giants have taken the lead in making it clear that they will cancel or reduce autumn clothing orders. American sports giant Nike said that it has canceled about 30% of its orders before the autumn and year-end shopping seasons. factory orders; American fashion luxury group Ralph Lauren said it has canceled about two-thirds of its autumn orders.
The future of autumn orders is so uncertain. Naturally, there is a serious lack of stamina for printing orders in this area. But what is even more alarming is that if there is noIf the spring clothing inventory in the first half of the year is well digested, it is very likely that this part of the inventory will be transferred to the next spring. If you miss the two peak seasons this year and miss the spring market next year, the printing market will be even more miserable.
Obviously, the market is not only bleak for printing factories, but also for dyeing factories. The situation is also less optimistic than in the previous period.
2. The operating rate has dropped, and the dyeing fee is clearly negotiable
The production status of dyeing plants is the most intuitive feedback on the textile market. Although the overall printing and dyeing market is in poor condition this year, the operating rate performed well half a month ago during the off-season. However, this state lasts very short-lived.
“In July, the factory’s daily warehouse volume could reach 400,000-500,000 meters per day, and the operating rate could be maintained at 60-70%, but the market has not been good recently. Now the factory has only about 350,000 meters of warehousing every day, and the operating rate can only be guaranteed to be 50%.” said a person in charge of a dyeing factory.
July and August are the traditional off-season for textiles. I thought that the market for special dyeing factories this year was not weak in the off-season. Unexpectedly, the market situation is fleeting. While orders continue to decrease, dyeing factories can only seek to reduce dyeing fees to attract orders. It is reported that many large factories have begun to notify that for some large customers and large order prices, they can directly communicate with the dyeing factory owners and provide appropriate preferential prices in order to retain customer orders.
The order volume is limited, and continuing to reduce production capacity is not a long-term solution. Unfortunately, dyeing factories can only compete for orders by lowering prices. However, dyeing factories do not have the same cost advantage as weaving factories. The price of upstream chemical fiber raw materials has dropped, and weaving companies can confidently lower the price of gray fabrics significantly. However, the price reduction of dye costs in dyeing factories is quite limited. Secondly, the production costs of dyeing factories are scattered, including rent, water, electricity, gas, labor, fire protection, environmental protection, etc., which are very complex. Dyestuffs alone are not enough to have much impact on dyeing costs. Dyeing factories may sacrifice a lot by taking the initiative to significantly reduce prices. Most of them are losing money and making money just to maintain normal production.
With the normal rebound from low prices, the possibility of a sharp rise in polyester filament yarn is not high
Although polyester yarn has ushered in a wave of destocking under the favorable resonance of all parties, and weaving manufacturers are actively replenishing stock, there are still major negative factors behind this. Especially under this year’s poor general environment and the traditional off-season situation, negative factors are more likely to be “fatal”. In today’s textile market, the phenomenon of two-level differentiation is more obvious, and products are unevenly hot and cold. Although the transactions of some products are hot, looking at the entire market, unsaleable conventional products are more common. Local improvements cannot continue to drive market conditions to warm up. Therefore, most weaving manufacturers, in addition to lowering production in the later period, still have accumulated inventory. According to reports, the current inventory of gray fabrics in Shengze is around 45-46 days. Inventories continue to reach new highs, and the demand for polyester yarn will weaken even more obviously.
However, we must also see that although there have been more goods sold in the market recently, it only affects a few products such as T8, washed velvet, and imitation memory. Products such as pongee, polyester taffeta, and imitation silk that occupy the bulk of the market are actually not ideal in terms of shipment volume due to the large amount of inventory accumulated in the early stage.
Therefore, from both upstream and downstream perspectives, there are not many positive factors for the price increase of polyester filament at this stage, and these positive factors are all unsustainable. Therefore, the editor interprets this rise more as a normal correction of polyester raw material prices that have been too low for a long time. The price may continue to rise slowly in the future, but in the absence of other positive stimulation, a sharp rise is unlikely.
What to look at next for polyester filament?
The first is of course the epidemic. According to the most optimistic estimates, the earliest time the new coronavirus epidemic was brought under control internationally was in the fourth quarter of this year, which is only more than a month ago. Of course, judging from the current situation, confirmed cases around the world are still growing rapidly, and there are no signs of being brought under control yet.
However, no one can predict the changes in the epidemic. In the future, the epidemic in some overseas countries and regions may be controlled first, and it is still unclear whether some markets will be the first to recover.
The other is the rapidly changing international relations. Since Trump came to power in 2016, he has been “making trouble” non-stop. After the outbreak of the epidemic in 2020, due to a series of “smart extermination” operations, the number of infections in the United States was the highest in the world, and Trump also had the highest number of infections in the world for this reason. Support ratings plummeted. In order to be re-elected, he has started to operate more crazily than before. Recently, the international version of TikTok has caused a stir. After Pompeo tasted the sweetness, he threatened to remove more Chinese applications. Will this turmoil affect the textile industry? Foreign trade is also still unclear. </p
