Limiting power and production, it is a “king bomb”. And this “king bomb” is here again! At present, more than 20 provinces, cities and regions across the country have implemented power outages and power rationing to varying degrees. The production capacity of high energy-consuming enterprises such as chemical industry, building materials, textile printing and dyeing has been restricted, forming a “wave of shutdowns”.

At this time, the gray fabric market in the textile industry is cooling down. According to market feedback, the order-taking atmosphere has declined in late October, and the sales of gray fabrics such as down fabrics and velvet fabrics, which were better in the early stage, have declined. PTA has also made a correction under the influence of the overall decline in the domestic energy and chemical sector. From the beginning of October to the present, PTA has fallen by 435 yuan/ton in the month. Affected by this, the price of polyester filament began to loosen, plummeting by 300-500 yuan/ton last Friday. However, downstream weaving companies generally wait and see, and transactions are sluggish. The daily production and sales of last Friday’s big promotion only exceeded 100.

But under such a market situation, most textile people are still bullish on the market outlook. Why is this?

Crude oil is forecast to reach US$100/barrel

Analysis and market forecasting are always inseparable from the upstream and downstream industrial chains. First, from the upstream perspective, the recent crude oil price has continued to rise against the background of the global energy crisis, coupled with the agreement to increase production slightly at the OPEC+ meeting in October. International oil prices have continued to rise, with Brent oil exceeding 80 yuan/barrel. At the same time, Goldman Sachs believes that if this situation continues, Brent crude oil prices will reach $90 per barrel by the end of the year, and there will continue to be upward risks. At the Russian Energy Week in Moscow, Putin believed that oil prices could rise to $100. The market is strongly bullish on crude oil. With the possibility of crude oil rising so much in the later period, polyester products will inevitably be affected, thereby driving up the price of polyester filament. The current price of polyester yarn is no longer at this year’s low level. If it goes up again in the future, gray fabrics will be forced to rise no matter what the atmosphere of downstream orders is.

Power restriction plan or restart

The most critical factor affecting the later market is power restriction and production restriction, which is a “king bomb”. At present, more than 20 provinces, cities and regions across the country have implemented power outages and power rationing to varying degrees. High energy-consuming enterprises such as chemical industry, building materials, textile printing and dyeing have limited production capacity, forming a “wave of work suspensions and holidays.” The Jiaxing area of ​​Zhejiang Province has launched a Class D plan for orderly electricity consumption from October 28. Among them, all texturing companies in the Tongxiang area will be suspended from October 28 to November 4, and polyester companies will be suspended from October 28 to November 1. The load will be reduced from 17:00 on the 18th to 9:00 the next day. Northern Jiangsu, Xiaoshao, Cixi, Haining and other places still have dual control policies in place. Although power rationing has been canceled in Suzhou, there is still a plan to restart orderly power consumption in the future, and it has been reported online that it will start on the 10th of this month.

As of November 3, the operating rate of looms has dropped slightly to about 75%, and the inventory of weaving gray fabrics is at a low level of 28.3 days. With production restrictions in many places, the overall production capacity of the textile industry is still low. It cannot be ruled out that the supply of some gray fabrics is tight and the rush for fabrics has reappeared.

Cold air, “Double Eleven” drives new orders

Although the Double Eleven pre-sale has begun, from the perspective of the textile market, it is not over yet, and there will be a wave of market orders about to be issued. A very important reason is the weather! It has entered November, the temperature in the north has cooled down, and the weather in the south allows you to wear short-sleeves again. In such weather, the demand for winter clothing is obviously not up to expectations. The good news is that according to the weather forecast, strong cold air will begin to affect our country from November 4, bringing wind and rain and snow. The weather in most areas will turn around later this week, with severe cooling. Under the dual factors of this wave of cooling and the “Double Eleven” e-commerce festival, the textile market will reach its climax. Therefore, this is the most important factor for cloth bosses to predict the later market trends.

Here, the editor would like to remind textile bosses that it is a good thing to have high bullish sentiment and drive enthusiasm for production, but remember to be overly optimistic. Nylon gray fabrics are a lesson learned from the past. Once production capacity is restored and supply is sufficient, the first thing to bear the brunt is price reduction, followed by overcapacity and selling at low prices.

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