Linzi, Zibo: Analysis On Production Cost Of Textile Industry In The First Quarter

Linzi district and textile in Zibo city Shandong Province

The main industries concerned are polyester, chemical fiber, acrylic and some cotton spinning industries.

First, the polyester filament market needs to be ready through 9000 points.

The opening rate of domestic terminal looms is getting warmer. At the same time, the stocking and weaving factories are gradually getting rid of stocking before the festival. There is a demand for filling in the polyester filament market.

However, the upstream crude oil, PTA, MEG market is weak and volatile, and the overall stock of polyester factories is still at a high level. Short term polyester filament market is still not enough.

In the first half of March, the market of polyester filament showed a narrow oscillation pattern.

As of March 15th, the mainstream price of polyester filament POY150D/48F market was 8600-8800 yuan / ton, compared with the end of last month, the market price fell slightly by 100 yuan / ton.

There are two main factors behind the insipid fluctuation of market prices.

First, the cost side collapsed.

In March, the two largest raw material for polyester production was expected to drop.

Among them, the PTA performance is relatively mild, the price of 5940 yuan / ton fell to 5670 yuan / ton, or 4.5%, MEG price fell fiercely, from 8010 yuan / ton to 6810 yuan / ton, or 15%.

Second, the demand is weak.

After the Spring Festival, recruitment difficulties seriously affected the start up of the terminal textile enterprises. Most of the booting and weaving links were delayed for 3-4 days compared with previous years.

At the same time, the decline of polyester raw material prices has made the purchasing attitude of the bomb and weaving factories prudent, mainly based on the preparation before the year of digestion, and the production and sale data of polyester factories have continuously suppressed the price of polyester filament.

In the coming period, the market trend of polyester filament market will continue to narrow.

The main basis for making this judgement is as follows: first, the international oil price is biased downward, and 60 US dollars / barrel is hard to become effective support.

On the one hand, the recent US economic figures are all released, though occasionally weak, the Fed's interest rate increase next week is expected to remain strong, which to some extent suppress oil prices; on the other hand, the OPEC has cut down production strictly, but there has been internal disharmony. The views on oil prices are not unified, which makes the prospect of production reduction relatively vague, and the driving force of the downward pressure on oil prices is increasing.

As a result, oil prices will continue to increase next week, once the oil price falls by 60 US dollars per barrel.

Second, polyester raw materials repair consolidation, the market rebound momentum is not good.

The biggest obstacle to the PTA market rebound is mainly due to the high inventory of finished products in polyester factories, resulting in insufficient buying in the spot market.

In addition, Jiaxing Petrochemical 1 million 100 thousand tons of line restart expected, hedging part of Yisheng device brings good maintenance.

At the same time, crude oil and PX market trend is relatively weak, lack of directivity to PTA, and rebound power is not good.

In terms of MEG, by March 15th, the inventory of MEG main reservoir area in East China was 716 thousand tons.

Next week, 190 thousand tons near the port, the overall inventory steadily increased, the only support for the market is the stimulation of delivery, but because of the abundant port stock, so the power of delivery weakened.

Third, the starting rate of terminal looms is generally warmer, but the stock of polyester industry still needs to digest for a period of time.

In the near future, the overall loom rate of terminal looms has warmed up, and the comprehensive start-up rate of Jiangsu and Zhejiang has gradually recovered to 8 near the level. Meanwhile, the water jet looms have performed well, and the imitation silk and imitation memory fabrics have been sold dynamically, and the price of grey cloth has increased by 0.20 yuan per metre after the Spring Festival.

However, the stock of polyester industry is still at a relatively high level.

As of March 15th, the mainstream stocks of polyester POY and FDY were on the 12-16 day, a few higher than the 20 day, and a few less than 7 days; the mainstream stocks of polyester DTY were in 20-30 days, a few were higher than 35 days, and a few days were near 10 days.

To sum up, the starting rate of the terminal looms and the overall warming of orders, and the gradual accumulation of pre stocking before weaving and weaving factories, there is a demand for filling in the polyester filament market.

But the upstream crude oil, PTA, MEG market is weak and volatile, and the overall stock of polyester factories is still at a high level.

We believe that short term polyester filament market is still not enough momentum to rise.

Two, polyester staple fiber reexpansion after 5 years, profit or redistribution of industrial chain

Polyester staple and pure polyester yarn have been hitting the lows since January 2016, and the industry life cycle has been adjusted and funds driven. In 2017, the volume and price of the industrial chain increased and profits increased.

The efficiency of the polyester fiber is increased, and the production of polyester staple fiber is increased. However, the main downstream cotton textile industry is constrained by artificial and policy problems, and the terminal textile weaving is also facing the practical pressure of high labor and high dyeing cost, which is pferred to reduce the consumption of polyester staple fiber.

In March of this year, the polyester fiber came back to the level of January and dropped rapidly to the level of January. At present, the bottom line is expected to increase gradually. However, the problem of industrial chain profit imbalance has not yet been solved. Polyester staple fiber and pure polyester yarn can stop falling, but fear of squeezing profits.

Direct spun polyester staple fiber: output increased significantly in 2018 compared with 2017. Many factors boosted the polyester fiber industry in the past. The industry price and profit level also rose from the trend of slump in the past three years and usher in a booming business cycle.

However, due to the new wave of capacity expansion caused by the high profit and the improvement of demand, in 2018, the direct spinning polyester staple market will still face a certain impact in the face of the new production capacity and the restart of the old capacity.

As shown in the figure, the expected output of direct spun polyester staple fiber will reach 1 million 279 thousand and 700 tons in the 1 quarter of 2018, up 8.58% from the same period last year.

In April, a set of 100 thousand tons of Huaxi chemical fiber plant in Jiangyin is expected to be restarted. Suqian's Yida (raw Xiangsheng) 280 thousand ton short staple device is also expected to restart, and the Fujian staple fiber 250 thousand ton short fiber device will be restarted in April. So the production of direct spun polyester staple fiber will continue to increase in April, and the industry output will be up 12.21% in April.

Moreover, due to the sequela of the "ban on waste" policy, the industry still feels that there is a supply gap for direct spun polyester staple fiber, which has intensified the industry investment boom in the past 1-2 years.

Although the new production capacity is mainly based on differentiated varieties, the restart of simple capacity will also have a great impact on the market.

The cotton spinning industry is not enough to start up. For the raw materials, the pure polyester yarn, polyester cotton yarn and polyester viscose yarn spinning products are the main downstream consumption areas. However, such enterprises are facing more substantive problems, prompting the industry to be blocked in 2018.

As far as the size of enterprises is concerned, most of the producers of such products are SMEs.

According to Zhuo Chuang statistics, by the end of 2017, the textile industry had 84 listed companies on the main board, while only 3 cotton spinning businesses accounted for 3.57%, and among the 3, pure cotton yarn occupied the main proportion.

As far as differentiation is concerned, the dissimilation rate of pure polyester yarn, polyester cotton yarn and polyester viscose yarn is obviously insufficient, and the homogenization of products is more serious.

In pure polyester yarn, knitted yarn occupies more than 85% production proportion, and the proportion of pilling resistant and flame retardant varieties is very small. The proportion of polyester and viscose yarn AB series has increased in recent years, but it is still not comparable to conventional flat yarn production. Among the polyester cotton yarns, ring spinning and T/C 65/35, CVC 60/40 and other series are still the main varieties, and the proportion of Siro and eddy current is high and the market share is small.

As early as in September 2016, the Ministry of industry and information technology released the "textile industry development plan (2016-2020 years)" will use industrial textiles as one of the key areas of textile industry development.

And as shown in the previous illustration, the textile industry in the main board listed in 2017 occupies 4 industries and occupies the first place in the industry. It also illustrates the status and development of industrial textiles to a certain extent.

In the traditional cotton textile industry, due to imperfect supporting facilities, the added value of products is not obvious, the size of enterprises is small and medium-sized, and the serious homogenization of products is also the cause of enterprises' long-term constraints on various costs and policies.

Financing difficulties and recruitment difficulties have also been a normal problem since 2016, and in 2017 there was no one listed on the main board with cotton spinning as its main business.

Up to 2018, the recruitment difficulty has been upgraded to a new level. The cotton spinning start-up rate is still far below the level of the same period of last year as of the end of March. The yarn production is limited to a certain extent. Therefore, in 2018 1-3, the T32S work cost can be more than 10% of the same period last year. However, if the cost of the idle machine and the labor cost increased, the actual T32S profit level has not been significantly improved.

The drop will not drop, but the impact of polyester staple fiber and polyester yarn profit or the pressure of cotton spinning starting due to redistribution and the decline of ethylene glycol after more than 1000 yuan a year, the price of polyester staple fiber also dropped from the high point of 9050 yuan / ton after the festival to the current 8700 yuan / ton, with a total decline of 3.87%.

The price of recycled polyester staple fiber has been shrinking.

The price difference between high strength and imitation has been less than 200 yuan / ton, and at present, the price of direct spinning polyester staple fiber (commonly known as big chemical fiber) has been low to 8600 yuan / ton.

And polyester raw material has experienced a deep fall in March, there is repair demand in the market. Device maintenance is a good supporting reason.

Specifically, in 4-5 months, there was a maintenance plan for 9 million 100 thousand tons of PTA such as Peng Wei petrochemical, Yanda, Jiaxing petrochemical and so on. It is expected to lose about 140 thousand tons of output.

Ethylene glycol in the presence of Yangba petrochemical, Tianjin Sino sand, Chengdu Petrochemical Company, Zhenhai Petrochemical, Ningbo Wo yuan (Fu De energy), Tongliao gold coal and other equipment repair expectations, is expected to lose 150 thousand tons of output in April, polyester raw material production to a certain extent, compressed to polyester staple fiber.

But there is still a lot of worries about whether the price of PET staple and polyester yarn can be promoted collectively.

From the terminal point of view, the textile enterprises are facing the problem of raising fees and labor costs. If the price of pure polyester cotton spinning products is rising, the spinning enterprises are likely to be unable to make ends meet, and the situation of cautious purchase will occur. At the same time, PTA and MEG will also rise in price due to lower production. When considering the acceptance ability and cost pressure, polyester staple and pure polyester yarn may be in a state of stalemate, but the profit pendulum will swim down moderately.

Three, acrylic fiber: downstream start gradually improve market turnover is still normal.

After the Spring Festival, the acrylic fiber industry returned to work slowly.

The starting point is low, while the raw materials for raw materials in the downstream cotton mill are insufficient. At present, the price of the acrylic fiber is high, and the raw materials of the cotton mill need to be purchased.

Entering the March, although the price of the downstream acrylic fiber has been greatly raised, the focus of the market has been around 1000 yuan, and the profit pressure of acrylic fiber has eased slightly. However, at present, the operation of the acrylic fiber industry is not optimistic.

The price of acrylonitrile has continued to be high and volatile, and the price of acrylic fiber has been greatly increased under the support of the cost side. However, at present, there is a big gap between polyester staple, viscose staple fiber and acrylic fiber in terms of related products, which leads to a more obvious price advantage than that of substitutes.

Although the current acrylic fiber industry has seen a gradual increase in the operating rate of the downstream cotton mill after the Lantern Festival, most manufacturers are not yet ready to prepare raw materials before the festival.

However, from the understanding of cotton mill, the price of raw materials continued to be high, and manufacturers just needed procurement. At present, the price of raw materials is still limited.

Demand support is limited, cost pressures are hard to alleviate, and acrylic fiber industry starts to continue low.

Four, cotton planting: bad margins around the mainland cotton area or a slight decline.

Cotton trading is weak, Zheng cotton futures are down, and there are many bad factors in the market.

In addition, cottonseed prices are still on a downward trend, cotton prices are forced to buy seed cotton under pressure of cost pressure, or further to combat cotton farmers' enthusiasm for planting cotton.

The reserve cotton wheel was launched in March 12th. As of March 27th, the total planned output of 360 thousand tons was up to 236 thousand and 400 tons, and the turnover rate was 65.63%. The highest price was 16310 yuan / ton, and the lowest price was 12940 yuan / ton.

The average daily markup of real estate cotton is less than 300 yuan / ton, and the average increase price of Xinjiang cotton is basically 500-700 yuan / ton, which is very limited compared with the same period last year.

And in the past week, the turnover rate of reserve cotton has been maintained below 60%, and downstream textile enterprises and traders have been very cautious in entering the market.

Zheng cotton main 1805 contract began to decline after closing nearly two month high in March 7th, and has been entrenched at the 15000 yuan / ton mark at the recent stage. It has no positive support for the fundamentals, and Zheng cotton's rising kinetic energy is insufficient.

The low turnover of cotton reserves and the weakening of futures prices have created a market bearish mentality.

Under the large market supply environment, the downstream textile enterprises are maintaining small quantities and scattered new cotton purchases. During the month, the shipment of cotton enterprises in the mainland continued to be sluggish. Under the pressure of shipment, the price of lint cotton dropped by 150 yuan / ton compared with the beginning of the month.

But cottonseed prices also showed a downward trend, leading to slender profit margins and even upside down.

At the cost of high profits, the downward trend of cotton prices, cotton prices to buy seed cotton, since last week, the mainland seed cotton purchase price fell 0.05 yuan / Jin.

In 2017, the income of cotton planting in the mainland dropped by more than 200 yuan / mu compared with 2016, which is generally lower than that expected by cotton farmers.

In addition, the seed cotton prices further declined in the early stage of cotton planting, or to some extent, the negative atmosphere of cotton farmers unwilling to continue to plant cotton.

As the weather gets warmer, spring ploughing is coming.

According to Zhuo Chuang market research, the cotton planting trend of cotton farmers in the Mainland generally showed a downward trend. Among them, the cotton area in the Yangtze River Valley decreased significantly, or decreased by 10% or so. The cotton planting area in other areas decreased by 5% or less. The total cotton planting area in the mainland is expected to decrease by about 3.5% this year.

According to the cotton growers response, there are two main reasons for the estimated decline in cotton planting area. First, there were more rain during the boll opening period last year, and the cotton plants lodged, rotten peach and peach seriously, resulting in a decline in seed cotton yield and quality, and the average selling price of seed cotton was less than 0.5 yuan / kg in 2016, which eventually led to a decline in cotton planting income. This further affected some cotton farmers who were unwilling to continue to grow cotton or reduce their planting area. Two, some cotton growers were prepared to increase the planting area of corn, wheat and rice and make time for going out to work.

Five, cotton spinning demand is not up to expectations textile enterprises intend to follow the market operation.

In the near future, the news is partial to lack, the cotton spinning industry performance is not satisfactory, the industry has a strong wait-and-see mood, the trade sides are conservative in operation, and the pure cotton yarn market is rational.

With the gradual digestion of the previous orders, the textile enterprises' new single replenish is limited while the overall demand is not heavy, while the short and scattered orders can temporarily maintain textile processing.

In addition, it is learnt that because of pure cotton yarn for a long time in the meager profit mode, some textile enterprises gradually reduce the supply of conventional varieties, and the desire for processing on the basis of single and on demand is strong. But home textile and clothing orders are less than in previous years, and the downstream prices are being priced and inquired. The operating pressure of enterprises still exists.

According to market research, although the adjacent traditional peak season, the market is in a pattern of incompatible demand and competition. The operating rate of pure cotton yarn enterprises is still lower than the same period in previous years, and the overall operating rate is around 7.

Large scale and regional enterprises have little change in hand holding orders.

In a relatively limited environment, the rapid growth of social inventories is limited, and the mentality of textile enterprises is relatively calm.

At present, the mainstream price of 40 combed rings in Shandong Liaocheng area is 24000-26000 yuan / ton, which is slightly lower than the corresponding price at the same period 500 yuan / ton.

From the supply and demand situation of textile raw materials, the supply of cotton market has increased since the launch of the national cotton store in March 12th, and has a strong impact on the spot market.

Prices declined slightly, at 200-300 yuan / ton.

However, high quality Xinjiang cotton is still high in the situation of rare and expensive things.

In the arrogant environment, the quota of imported cotton is limited, but the medium and long term supply environment can not be changed. The textile enterprises are rational stocking, and the mentality of using imported products is prominent.

It is hard to predict that the cotton market will go up and down, and the overall pressure on the spinning enterprises is not strong enough for the cost side of the spinning enterprises.

On the whole, when the cost level is insufficient, if there is no real good to boost, the demand for cotton textile will be better.

However, when the traditional peak season comes, if we can find the opportunity, the market price of pure cotton yarn will still have room for inflation.

In the short term, the textile enterprises should rationally regulate the start up and inventory, keep the goods at a fair price, and wait for the good ones to be released.

In addition, although the price of Sinopec and Jilin acrylic fiber has been greatly explored, the current situation of manufacturers' profit is that Sinopec's acrylic fiber is still in a state of loss, manufacturers started to continue low, the overall supply of goods is limited, while the Jilin acrylic fiber is safe, but the low-end quotation continues to exist, and the downstream cotton mill's enthusiasm for purchasing high priced raw materials is limited.

And then

The market outlook shows that although the price of acrylonitrile has been narrowed down after the holiday, since April, the acrylonitrile plant will continue to carry out the overhaul plan, and the risk of acrylonitrile price drop is low.

In terms of demand, the price of raw materials continues to be higher, and the sales pressure of cotton mill is obvious.

Under the supply and demand game, it is expected that short-term acrylic price will remain high and volatile, and the industry starts or continues to slump.