Since September, the polyester market has been shrouded in the shadow of expectations of overcapacity. Recently, the negative news has been exhausted. With the implementation of maintenance equipment, prices have also shown signs of stopping their decline.
Recently, multiple contracts such as PTA and ethylene glycol in the domestic commodity futures market have driven increases. With the first phase results of trade negotiations being reached, there will be new driving factors for the polyester market to rise in the later period.
However, based on the recent analysis of the operation of the domestic textile market, although an agreement has been reached, the domestic textile market has not been as good as before. Several favorable fluctuations occurred violently, and the orderly rise and fall of commodity futures prices did not have too much impact on the market. The entire polyester market remained in a weak state throughout the year.
The reason is that the editor believes that in the short term, polyester raw materials may stop falling and stabilize, and the benefits of trade have somewhat boosted the confidence in the production of the weaving market, so we should be cautious. The raw material preparation operation has changed to a relatively positive and optimistic one, and the raw material preparation inventory may be partially increased, which will also enable the polyester factory to accelerate destocking at the end of the year. However, as the market enters the end of the year, the terminal operation rate will enter a sharp decline. In addition, weaving funds are relatively tight this year, and the situation of preparing raw materials is not too optimistic.
At the same time, in view of the order situation, the time to reach this node is relatively late. Currently, tariffs have not been increased and there was no rush for exports at the end of last year. Therefore, the actual recovery of orders is small. The editor feels that this should also be reflected early next year.
In the long term, these two factors determine the new direction of the market.
1. Trade friction has a profound impact on the textile industry, but it is not the only reason
The tax increase list involves most of China Chemical fibers, yarns, fabrics, carpets, industrial textiles, clothing and home textiles. According to customs data, China’s annual export volume of textile and clothing products to the United States is approximately US$50 billion.
Trade barriers have directly caused a significant decline in China’s textile and apparel exports to the United States. Among them, chemical fiber long and short yarns have declined most rapidly and are highly substitutable. Yarn exports to the United States are relatively small. optimism. With the increase in tariffs, the export of textiles will face greater difficulties, and the export pressure on clothing and home textile products will be more prominent in 2020.
From the data of China’s major export markets, according to customs statistics, from January to June 2019, my country’s cumulative export volume and price of clothing and clothing accessories fell, and the export amount was 66.574 billion U.S. dollars, a year-on-year decrease of 4.7%. The number of clothing exports was 14.132 billion pieces, a year-on-year decrease of 1.0%. The average unit price of clothing exports was 3.64 U.S. dollars per piece, a year-on-year decrease of 4.7%. Trade friction is one of the reasons for the slowdown in China’s export growth, but it is not the only reason. It also includes factors such as the slowdown in global economic growth and the adjustment of the layout of the international textile supply chain. For example, some emerging countries are currently experiencing outstanding growth in their international trade share. .
In addition, with the changes in the external situation and the expansion of the scale of the industry itself, the development of China’s textile industry has already entered a cycle of slowdown in total growth and deep adjustment and transformation. The current development speed is at Within reasonable expectations, this is inevitable for the growth and structural adjustment of the textile industry. Therefore, it cannot be said that the increase in tariffs is the core factor in the slowdown of the industry’s growth. On the contrary, the increase in tariffs has accelerated the transformation and upgrading of the industry. In the future, the key areas of direct participation in international market competition will gradually shift from clothing to mid- and upstream products in the industrial chain such as fabrics and fibers.
Today, good news has come from the trade environment, which may have eased the tense textile situation. Phased orders or market information have recovered, but there are still many uncertainties, so we need to be vigilant. The trade situation is volatile.
2. The textile and chemical fiber market under the rules of the business cycle: is undergoing deep adjustment due to overcapacity
Since this year, the entire industry chain including PX, PTA, polyester, weaving and other industries has been experiencing overcapacity, and the market will make deep adjustments in this haze.
Since 2017, while the number of water-jet looms in traditional textile clusters in the Yangtze River Delta has dropped sharply, the number of water-jet looms in emerging textile clusters such as Anhui, Northern Jiangsu, Hubei, and Jiangxi has also increased. However, the machine has experienced a blowout situation. Enterprises that originally owned 100 or 200 looms in Jiangsu and Zhejiang areas now have 300 or 500 looms after the transfer. The overall number of water-jet looms has not decreased, but is increasing.
However, because the technical level of emerging water-jet looms is not up to standard, the products produced are relatively homogeneous, which ultimately leads to a surplus of conventional products in the market. In fact, after investigation, it was found that in addition to water-jet looms, the production capacity of warp knitting machines and air-jet looms has also been surplus to varying degrees in the past two years. According to statistics, even though the market situation is not optimistic this year, 120,000 looms will be launched in various places. At the same time, the shrinkage of clothing consumption has directly led to the extreme increase in product inventory.
Similarly, the haze of overcapacity also appeared in polyester raw materials. Next, domestic PX capacity expanded wildly, and domestic PX supply further increased. It is also the peak production period for the domestic PTA industry, and the overall oversupply is expected to increase.
Of course, when good trade meets the expansion of production capacity, whether the market can change the previous decline still requires everyone’s efforts. We hope that textile and chemical fiber…All the board members can spend the future with a smile! </p
