Textile Industry: The Industry Chain Will Continue To Be Difficult.

As PTA, polyester and weaving are all high inventories, enterprises are bearing heavy loads.

The performance of crude oil, which is the source of the industrial chain, has also greatly reduced the price of the downstream market.

Since the end of June, international crude oil prices have continued to plummet, and WTI crude and Brent crude oil indices have fallen by about 16%.

Market participants analyze the market, they think, downstream.

The "light" situation will be a "fetter" for PTA and the polyester market.

Even if the PTA market is boosted by crude oil, the market will be dragged down by the downstream market.

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It seems that because the excess capacity of the PTA industry chain is not effectively cleared and the market competition is serious, it will eventually reduce the profit and cash flow in every link of the industrial chain.

The weakness of the market will continue after the inefficient production capacity of the industry chain is not cleared.

"At this time last year, the price of WTI crude was around $86 / barrel, and now

Below 50 US dollars / barrel, the collapse of crude oil prices has a direct impact on market confidence.

Wu Xiaofen said that although crude oil has rebounded several times this year, the overall position is still low, which makes the market bearish sentiment.

"Crude oil prices rebounded under the influence of geopolitical factors and the weakening of the US dollar.

But the pattern of international crude oil supply and demand that dominated the trend of oil prices has not changed significantly.

The supply of crude oil in the month of OPEC9 was 31 million 570 thousand barrels, the highest level since 2012.

With this news, crude oil prices fell by more than 5%, and the valuation of the entire industrial chain was therefore reduced.

Wei Lin said.

In addition, from the market reaction, we can see that, despite the recent rebound in crude oil and driving up polyester, the volume of terminal orders is limited, coupled with the tight funds and high inventory of weaving enterprises, the market is not particularly keen on the "silver ten" market.

At the same time, the overcapacity of the PX PTA polyester industry is serious, and the end of this year's textile and garment enterprises has gone bankrupt. In addition, the banks have tightened up their loans, the orders have shrunk seriously, and the market competition is fierce.

Terminal demand and crude oil prices will be hard to reverse in the short term, while supply pressure will also increase in PTA.

It is understood that 400 thousand tons of Shanghai Jinshan Petrochemical and 650 thousand tons of Yisheng Petrochemical have been restarted on the first two days.

"According to the overhaul plan, 2 million 200 thousand tons of Yishi petrochemical and 2 million tons of Yisheng petrochemical plant will be restarted in the second half of October, and the market supply will be relaxed."

Wei Lin believes that the PTA price will continue to weaken in the short term.