Seeing that the time has come to the end of September, the “Golden Nine” that textile people were looking forward to has not come. The entire textile market is still in a tepid state, and the quantity and quality of orders have not increased. The reason is, in the final analysis, it is still the same sentence – buy up, not buy down.
Continuous decline, the industrial chain is in the doldrums, and the “Golden Nine” has not yet arrived
PTA article
Because of the futures market, PTA’s situation is the most serious when buying up but not buying down. As long as the price of PTA rises and some good news breaks out, hot money will flood into the market, pushing the price of PTA upwards. Driven by futures, spot prices will also soar.
Beginning in mid-July this year, as the price of upstream PX continued to rise, PTA also ushered in a rising market. The entire market lasted until the end of August, and the spot price of PTA rose from about 6,000 yuan to more than 9,000 yuan. Yuan, futures are also soaring. Among them, 1809 futures, which has the largest increase, has increased by more than 60%.
But it goes as quickly as it comes. In early September, the price of PX was still at a high level. As the market became bearish, PTA futures began to plummet. On September 17, the spot price of PTA also began to dive under the influence of futures, plummeting by 1,500 yuan in three days.
Buy polyester filament that goes up but not down The impact of the ester factory was huge. When PTA first rose, although the market was still in the off-season, polyester factories were doing very well. With high profits and the purchasing tide caused by rising prices, chemical fiber companies can make a lot of money.
But after August, PTA rose more than expected, and downstream companies expressed their inability to accept the rising raw material prices. Textile clusters in various places issued a joint production suspension initiative, targeting the chemical fiber leader.
After entering September, PTA futures began to fall, downstream prices were bearish on polyester filament, and the production and sales of polyester filament began to deteriorate. Then the entire polyester filament market fell into a vicious cycle in which the lower the price, the worse production and sales, and the worse the production and sales, the lower the price.
Downstream weaving
Compared with PTA and polyester factories, downstream weaving fabric companies are smaller and more dispersed , the tolerance to changes in raw materials is also lower.
The profits of traditional weaving factories are often only about 5%, but polyester filament has increased by more than 40% in one month. Even if the profits of conventional products are better in the first half of this year, they cannot withstand such an increase in costs.
Some companies that could not bear it began to limit production and suspend production, and traders were unable to place orders. If the price given is high, there will be no profit, but if the price is low, the soaring raw material prices will also discourage manufacturers.
September is the traditional peak season for textiles. In September last year, dyeing factories were out of stock and large and small orders came in endlessly. Manufacturers wanted to expand their production capacity several times. Basically, they could sell as much cloth as they had, and the supply still exceeded demand; By September this year, the price of raw materials has been falling, and everyone is waiting to see when the price will drop. With the mentality of buying up and not down, the textile market in September this year is tepid and can no longer afford the title of “peak season”.
Good news comes frequently, supply and demand reverse, “Silver Ten” can be expected
Cost side
9 On the evening of March 24, the price of British Brent crude oil exceeded 80 US dollars per barrel, setting a new rebound high after the international oil price plunge in 2015.
As of the close, WTI November crude oil futures closed up $1.30, or 1.84%, at $72.08 per barrel. Brent crude oil futures for November closed up $2.40, or 3.05%, at $81.20 per barrel, a new closing high since November 2014.
The sudden rise in crude oil has supported the price of polyester products from a cost perspective. Under the influence of crude oil, PX began to stop falling and rebound, and the spot price of PTA has also stabilized. It is believed that the price of polyester filament will also maintain stability soon.
Supply side
After September, as the price of polyester products began to fall, production and sales weakened. Various major manufacturers have begun production reduction plans.
In terms of PTA, according to statistics, the average operating rate of PTA has dropped to 75.1%, the real-time operating rate is 75.1%, and the effective operating rate is concentrated at 84.9%. Market outlook news shows that a 1.5 million-ton PTA unit in East China is scheduled to be shut down for maintenance on the 23rd of this month and is expected to last for about a month; another 1.2-million-ton PTA unit in East China is expected to be overhauled for three weeks starting from October 3.
In terms of polyester filament, due to low production and sales, polyester factories have begun to frequently reduce production and suspend production. As of now, the polyester operating rate has dropped to 80.01%.
Demand side
Although the quantity and quality of orders did not increase in September this year, the total demand in the entire autumn and winter market will not change much. .For clothing brands, the manufacturing cost of clothing is far lower than its marketing cost. The impact of the increase in the cost of gray fabrics on ready-made clothing brands is actually relatively limited.
In terms of exports, although affected by China The U.S. trade war and the impact of exchange rates have made life difficult for foreign trade companies this year. However, because it is difficult for Southeast Asian countries to challenge China’s low position in the textile industry in a short period of time, Chinese textiles will still be difficult to replace in the short term.
Under the combined effect of multiple favorable factors on the cost side, supply side and demand side, I believe that the market in October will be significantly better than that in September.
Although the “Golden Nine” has not yet arrived, the “Silver Ten” can especially be expected.</p
