This is a story about the love and conflict between the raw materials and the weaving market!
After experiencing the huge commodity bull market last year, this year’s It can be said that the price of polyester products has been falling all the way, which has made market participants a little confused. However, recently, the “weekend market” of polyester filament has been unexpected. Entering the second quarter, the polyester filament market has experienced four waves of market rebounds (at the end of April, the end of May, early June, and mid-June). The market is silent every weekday, and production and sales explode on weekends. After experiencing the continuous increase in production and sales, the inventory of polyester companies has dropped significantly. According to statistics, as of June 19, POY inventory has dropped to 4-8 days, FDY inventory has dropped to 10-15 days, and DTY inventory has dropped to 18-24 days. , which is the lowest level in nearly 2 months.
Market participants seem to have become accustomed to the market price of polyester filament being “a few days’ trip” every time. After all, “golden “Master Dad” is not rich. Although the upstream cost side has been boosted, crude oil has stopped falling and rebounded, PTA equipment has recently been overhauled, and the entire polyester raw material market has stopped falling, which has supported the bottom of polyester filament, but it is still unclear whether the downstream buyers will buy it. The direction of the raw material market plays a larger or even critical role. According to the author’s interviews and research, the recent mentality of cloth bosses mainly boils down to the following two points:
The price of raw materials is at It’s low, you won’t lose money if you buy some!
Compared with the desperate rise in the raw material market in August last year, the price of raw materials this year appears to be much lower-key. From the price trend of polyester filament in the figure above It can be seen from the figure that the current polyester filament products have been at low levels in the past year, which is also the reason why many textile bosses have purchased more or less raw materials.
“Raw materials are currently at a low level. Even if the gray fabrics produced at this price are piled at home, they will not depreciate as much as last year.” Mr. Chen, a textile boss in Wujiang area, said . According to statistics, the current average price of FDY150D is 8,100 yuan/ton, which is a decrease of 850 yuan/ton compared with the beginning of the year. Other products have also declined to varying degrees.
The inventory of raw materials is at a low level and must be used for production anyway!
In fact, every time there is a price increase in the polyester filament market, the downstream is very “cooperative”. The main reason is that after the Spring Festival to the Qingming Festival At present, the market has not released a big demand signal, and downstream buyers are more cautious about placing orders for fabrics. As a result, the market did not pick up as expected from March to April this year. The market transaction atmosphere is average, manufacturers’ inventories have begun to accumulate, and speculative operations on stockpiling of raw materials have been reduced accordingly.
As the market performance continues to be weak, raw material prices have fallen again and again, resulting in weaving manufacturers purchasing raw materials on demand. It is reported that in early June, the raw material inventory of most weaving manufacturers was 7-10 days. After two rounds of procurement, the raw material inventory rose to 10-15 days, which is low for manufacturers whose stocking cycle was 15-20 days in the past.
In addition, in terms of operating rate, the market operating rate in Jiangsu and Zhejiang regions is currently relatively high, especially for water-jet looms in the Shengze market, the operating rate remains at 80-90% , under high-load operation, purchasing raw materials is actually a necessity, which explains the recent frequent replenishment of manufacturers. However, because the inventory of weaving manufacturers is at a high level during the same period this year, it is difficult to realize the inventory, resulting in companies being more cautious about the use of funds and the raw materials. We have always maintained small orders, so polyester production and sales generally end after two to three days of travel.
After explaining why the cloth boss has been “paying” for the increase in raw material prices recently, another update The question that troubles everyone has also arisen: In an environment of high inventory and low demand, why are weaving manufacturers still “working hard” on production because orders are about to pick up?
Last week, “different” messages were issued in Changshu, Xiaoshao and Shengze markets Voice: Market orders have improved slightly. Some weaving factories that had no orders in the past also received some small orders last week. Some manufacturers that do custom weaving have more or less orders on hand to execute, and most manufacturers can still complete the orders on hand. By the end of June, the current work of better manufacturers can last until July.
During the interview and survey, half of the bosses still said that the current market conditions are poor and it is difficult to balance production and sales. However, many companies said that although conventional products are unsaleable, they are determined to cooperate with brand owners. Weaving product orders are still being placed as planned.
It can be seen that under the weak general environment, the market is not as pessimistic as rumored. Product trends have begun to become polarized. Some unsalable products have been in the accumulation stage of inventory, while marketable products have been in the inventory stage. Market production and sales can still be balanced.��After the market situation in the first half of this year that was “not strong in the peak season and very weak in the off-season”, some bosses said: No matter how bad it is, it will just be like this. It depends on whether there can be a turnaround in the future!
At least in the eyes of the editor, the textile market is releasing some positive signals!
1. Some product orders have begun to be placed, and there is always a rigid demand for the “Golden Nine and Silver Ten”;
No matter whether there will continue to be “discounts” during the “Golden Nine and Silver Ten” in the second half of this year, the apparel industry’s rigid demand for fabrics still exists. Although conventional bulk goods currently have overcapacity and are difficult to “turn around,” the market share of other products is still improving. It is reported that the current transactions of luggage fabrics, rayon linings, elastic fabrics, etc. are partially smooth.
2. Sino-US trade relations may ease, and orders that were suppressed in the early stage will eventually be released;
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The increase in tariffs imposed by the United States on Chinese products has actually troubled textile workers for a year. In May, the friction continued to escalate, causing some orders to the United States to begin to reduce. Although the current market situation is unclear, China’s status as the world’s processing factory will not be easily shaken, and the quality of its products and its long-term tacit understanding will not be easily replaced by Southeast Asia.
On June 18, the heads of state of China and the United States expressed in a telephone conversation that they would find a solution to the current differences as soon as possible. Many textile people believe that after a wait-and-see period of several months, orders that were suppressed in the early stage will eventually be placed.
3. The G20 summit is coming one after another, which is conducive to the release of policy benefits;
Each G20 summit will release some favorable policies for the market economy. This year’s global economic environment is not good. It is estimated that the “visible hand” and “invisible hand” will continue to bring benefits to the market. Boosting force.
4. Short-term changes in the RMB exchange rate deserve special attention, and the trend of trade negotiations is an important variable;
Whether these factors are signs of improvement or bubbles, at least the current dullness of the weaving market has made many bosses “accustomed” to it. Facing the ups and downs of the market, most of them are doing it down to earth. Bosses in the textile industry still choose to stick to the industry.
“The market is bad this year, but we will not reduce the start of construction. If we survive this year, there may be bad conditions next year. It’s the same spring!” said Mr. Chen from Wujiang area. At present, market participants are quietly waiting for the biggest “mystery” in the first half of the year to be revealed – where will the “sweater war” between China and the United States go…
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