See him building a tall building, watching him entertain guests! ——The recent thoughts of textile bosses on the raw material market!
Last week, due to the rebound in international crude oil, the raw material market ushered in a wave of market conditions. Polyester filament production and sales exceeded 100. This was less than 2 weeks after the last production and sales outbreak. This week, the raw material market was once again boosted by the good news about crude oil. On the 8th, the market was in a buying mood again, and the polyester market once again staged a wave of prices. This was only one week away from the last time!
The darkest hour of raw materials may be over!
In March this year, Saudi Arabia launched an oil price war and significantly reduced official selling prices, the largest drop in 30 years.
After OPEC reached an agreement to reduce production in April, oil prices continued to rebound.
On June 6, a statement was issued saying that OPEC and non-OPEC oil-producing countries agreed to extend the current crude oil production reduction of 9.7 million barrels per day until the end of July. It is reported that the scale of the agreement is equivalent to about 10% of global supply. , oil prices stood at $40.
Polyester manufacturers have been affected by the rise in crude oil and the recent rebound in PTA and ethylene glycol. Prices have been raised one after another every day, and the cost of polyester filament is easy to rise but difficult to fall, which once again boosted its upward momentum.
On June 6, some manufacturers increased their prices by 50-100 yuan/ton;
On June 7, some manufacturers increased their prices by 100-200 yuan/ton. ;
On June 8, the general price rose by 50-100 yuan/ton.
In short, the price of polyester filament has increased!
It must be said that thanks to the bottoming out of international crude oil, it has injected a boost into the raw material market. As a “stimulant”, the current polyester companies can be said to be ushering in the best period since the end of the year.
From a profit perspective, losses have turned to profits, and inventories have also dropped from high levels to relatively reasonable levels. Among them, the inventories of leading polyester companies have dropped from the original high of 40-50 days. At the 10-20 day position, some second- and third-tier factories are even opening short orders, and the overall fundamentals are generally performing well.
It seems that the upstream of the entire textile industry chain has continued to release signals of bottoming out and rebounding. On the other hand, what is the phenomenon like in the downstream weaving market?
If in the seller’s era, the price of raw materials rises, it will usually bring the price of gray fabrics to rise together. For example, before the first half of 2019, raw materials and gray fabrics still experienced a good “honeymoon” “period”, they will rise together, but if it is in the era of buyers, life will not be so easy. On the one hand, weaving manufacturers have to be subject to rising costs, on the other hand, they have to retain price-sensitive customers, and they can only live a ” It’s a day when you get angry from both ends!
Selling goods at low prices
In May, raw material prices have been rising frequently, especially polyester FDY filament, used in the production of polyester taffeta and other products, has increased significantly, but this cannot be exchanged for the increase in gray fabric prices. After entering mid-May, the market price of gray fabrics has been particularly stalemate. Many companies are eager to sell goods at low prices, and the prices are as low as “floor prices.” The market has even seen a phenomenon where the price of finished products is lower than or equal to the price of gray fabrics:
210T polyester taffeta black is priced at 1.65 yuan/meter, 240T pongee original white is priced at 1.90 yuan/meter, 300T polyester pongee original white is priced at 2 yuan/meter, and 75D simulated silk is priced at 2.20 yuan /meter…
“The current dyeing fees and gray fabric prices are at historically low levels, but I dare not stock up more, mainly because I am not sure about the market situation in the second half of the year.” Wujiang area said a trader.
Shrinking profits
From the perspective of gray fabric profits, current purchases and ready-made gray fabrics maintain a slight loss or small profit. After all, the increase in gray fabric prices is not as good as the increase in raw material prices, so spot profits have not improved. Upstream raw materials have risen more than expected, and there is pressure for improvement in the end demand market. Therefore, the recent conflicts among weaving manufacturers have become more prominent. “Now that raw materials have increased slightly, it has obviously reduced our profit margins. Cloths cannot be found at affordable prices, making life more difficult.” said Mr. Zhu, the person in charge of a textile company that specializes in imitation silk fabrics.
A person in charge of a company with 200 looms said that the factory had been maintaining a level of around 80% recently, but it has recently dropped to 60%. The reason is that they underestimated the severity of the epidemic and believed that the downturn in the market would not last too long. They hoped to preserve workers and avoid being unable to recruit people when the market improved. Then, the current inventory continues to rise, profits are falling, and cash is already tight. , the only option is to reduce production.
Weak demand
Although summer has arrived, the cold winter on the consumer side continues. According to the latest National Bureau of Statistics data, from January to April, the total retail sales of consumer goods was 10,675.8 billion yuan, a nominal decrease of 16.2% year-on-year. In terms of textile and clothing retail sales, the total national textile and clothing retail sales in April 2020 reached 79.9 billion yuan, a decrease of 18.5% compared with the same period last year. From January to April, the total retail sales of textiles and clothing nationwide was 305.7 billion yuan, a year-on-year decrease of 29%.
It can be seen that the end consumer side has been in a weak state, thus suppressing the demand for fabrics. “There are very few orders for autumn and winter fabrics now. After loading the goods into containers before, recently they are all small orders. A friend who runs a garment factory also said that there has been no work since May, and the entire market has not recovered.” A four-dimensional worker Mr. Ma, the current trader, said.
The editor has something to say
The current textile market can be said to be “hot at the top and cold at the bottom” . The strong rebound of upstream raw materials versus the slow recovery of terminal demand, it is difficult to say who will win and lose.
However, it is worth noting that with the deployment planning of polyester leaders in recent years, the market production capacity is highly concentrated, and the right to speak of polyester filament is in the hands of several major textile giants. , so as long as the raw material side releases a price increase signal, it is easy to increase the quotation when the inventory is low, but its effect still needs to be verified downstream.
Compared with the excitement of raw materials, the weaving market seems deserted. Foreign trade has never fully recovered, competition in the domestic trade market is fierce, and overcapacity of conventional varieties in the market has destined that prices will be difficult to improve. However, as raw materials continue to rise, perhaps the embarrassing situation of “floor price” will be broken!
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