Since the spread of the global epidemic in March and the beginning of price wars between major international oil-producing countries, falling prices have become the mainstream of all markets around the world. Whether it is stocks, crude oil or even safe-haven commodities such as gold and silver, they cannot escape the fate of falling. In the past few days, gray fabric weaving has started a price war, which has now spread to the printing and dyeing industry. Wuhu Fuchun, a famous cheese yarn company, lowered its dyeing price on March 23. Among them, the dyeing fee for sock yarn, black silk, and black silk has been reduced by up to 2,500 yuan/ton.
The U.S. stock market fell sharply on Monday, with the Dow Jones Industrial Average falling below the 19,000-point mark, and the S&P 500 Index falling sharply since Trump All gains since Trump took office have been wiped out. At the same time, the stock markets of Asia-Pacific, Europe, America and other countries are also in turmoil. The US stock market has officially bid farewell to the bull market and experienced four circuit breakers in two weeks that are rare in the century!
This war extends to various industries!
For the textile industry, in addition to falling, it is still falling!
The financial industry has entered a bear market, and the textile market is not immune to the disaster. Following the collapse of crude oil prices, the polyester market is also in danger. PTA and ethylene glycol lack motivation to rise. In just one week from March 12 to March 19, the internal quotation of PTA fell by 395 yuan/ton to 3360. Yuan/ton, the internal price of ethylene glycol fell by 390 yuan/ton to 3,515 yuan/ton. With insufficient cost support, polyester filament prices have repeatedly hit bottom. As of the 24th, the prices of polyester filament products have fallen for more than 20 consecutive days.
Raw materials: The price drop comes too soon Fast like a tornado!
Textile boss: It’s fatal!
After the current contradiction between insufficient production capacity and tight supply has been perfectly transitioned, new contradictions have emerged again, doubling the pressure on the domestic textile market. One of the aspects is the continuous decline in raw materials. The bottom-line decline has made the textile boss very uneasy: Now I receive notices of price drops from raw material factories every day, and I have become numb!
Compared with the same period last year, the current price of the entire raw material market is “depressing”. The price focus of polyester filament continues to decline, and it has set a record in recent years. At the low level in 2017, product prices fell by close to 25%–35%.
This round of raw materials continues to fall, and the most direct factor is the plunge in crude oil. In 2016, because OPEC could not reach an agreement on production cuts, oil prices hit a low of $26.12 per barrel in February.
As the most upstream product in the entire textile industry, crude oil prices have fallen sharply, causing PTA and MEG to collapse. Polyester filament has also been doomed, with prices continuing to drop.
Cotton: In less than a month, it has dropped to the limit three times!
Textile boss: Take a pessimistic view!
Since March, Zheng Mian has started a continuous decline mode, refreshing the market perception time and time again. On March 9th, 19th, and 23rd, the market closed at the limit, and the limit fell three times in less than a month. On the 23rd, a “limit-down at the opening” was staged, and the rate of decline accelerated significantly. Zheng Cotton’s main 2005 contract jumped short and opened lower in early trading. It broke through the 10,000 yuan mark in the afternoon and fell to a low of 9,935 yuan/ton. This price is only a few dozen yuan/ton away from the historical low of 9,890 yuan/ton set by Zheng Cotton’s main company in 2016. Point of space, industry players exclaimed that it would become a memorable moment in the history of cotton.
On the 23rd, ICE cotton futures were at At the limit level, the main May contract fell to 50.68 cents/pound, a new low since May 2009. Concerns about the decline in cotton demand caused by the new coronavirus continue to rise globally, crude oil prices have also hit a 20-year low, and the substitution of chemical fibers for cotton has increased significantly. These two factors make the outlook for cotton demand very pessimistic.
Why does Zheng Mian keep falling? It is obvious that there is both a release of pressure from the expanding global epidemic and a weakening economy, as well as concerns about a sharp shrinkage in downstream demand. Before and after the Spring Festival, orders from domestic downstream textile and garment companies were dominated by foreign trade orders. After the holiday, as companies gradually resumed work, domestic demand was stranded, resulting in domestic sales orders that have not been improved. Misfortunes never come singly, the epidemic spreads rapidly abroad, and foreign trade orders also shrink. Most of the orders placed by some textile companies before the end of March were pre-contracts. After the holiday, new orders were significantly reduced, and some export orders experienced cancellations, exacerbating the concerns of all parties in the market about the big challenges facing the industry. The person in charge of a textile company in Jiangsu said that subsequent orders have declined, even though it has just entered the recovery period.Yes, the turmoil in foreign markets caused by the epidemic has also brought new drag on the current textile market!
Recently, a large number of well-known brands have announced the suspension of production: Hermès, Gucci, Chanel, Patek Philippe and other well-known global brands have announced the suspension of production, and many well-known foreign clothing brands such as ZARA have also announced the closure of overseas stores. Stores and foreign demand have been blocked, which has led to recent order cancellations and suspensions, which have had a lot of impact on both manufacturers and traders.
As early as the beginning of construction, many foreign merchants who placed orders years ago also specifically followed up on the orders and asked the suppliers to complete the orders as soon as possible. However, As a result, after the company worked hard to complete the work, it suddenly received a notice of order cancellation a few days ago. This has become a “common problem” in the industry!
“I was rushing to deliver the goods before, and finally got the order out of the printing factory, but I was picky and said it was not qualified. Originally, these situations would not happen! I don’t know what the customer is. I’ve wanted to cancel it for a long time but it’s still too difficult!” a trader said helplessly.
Not only foreign trade companies, but also the domestic sales market have encountered many problems. At present, major domestic professional markets are recovering slowly, and many textile companies have entered a stage of few or even no orders. “Now is a time of dilemma. It is easy to face losses or cancellations if you accept orders. There is also great pressure from all aspects if you do not accept orders. I hope that after March and April, we can usher in a new turn.”</p