China And The US Resumed Trade Negotiations, But Polyester Raw Materials Were "Scrambled".

In June 29th, the first meeting of the US dollar was held at the G20 summit in Osaka. The two heads of state agreed that China and the United States should resume economic and trade consultations on the basis of equality and mutual respect. The US side said it would no longer impose new tariffs on Chinese exports. The two countries' economic and trade teams will discuss specific issues.

How will the easing of Sino US trade relations affect the raw materials, market orders and the follow-up market of textile market? How will the weaving and raw material market behave?


"Scrambled" polyester Market


In the market, the response of polyester raw materials is always the fastest. With the good results achieved in the US dollar negotiations, polyester products such as PTA and polyester filament have begun to rise sharply.


In July 1st, PTA futures main trading, polyester filament prices rose 200-400 yuan / ton.


In July 2nd, the main force of PTA futures continued to keep trading, and the price of polyester filament increased by 100-300 yuan / ton.


But by July 3rd, the polyester market had not been able to fly.


In the evening of July 2nd, PTA night plate began to fall, and PTA continued to decline slightly in July 3rd.


In July 4th, PTA went down, and the price of polyester remained stable.


In July 5th, PTA continued to decline, and the price of polyester filament was partially reduced.


Polyester production and marketing, since July 3rd, polyester production and marketing is only around 1-2 percent.


In the short span of a week after the G20 summit reached agreement, PTA futures from continuous trading to limit down, such ups and downs, so that the weaving boss who was accustomed to the big storm had a bit of a sip.


Manager Wang, a Wujiang textile enterprise, said that the market is now frying out by raw material enterprises. They have not changed the way to buy raw materials at present, or with the purchase and use, the raw material inventory of the factory is maintained for about 10 days.


Another 300 machines, the chief operator of all kinds of polyester taffeta weaving enterprises, also said that before the wave of raw materials rose, their enterprises had already filled up the goods. They had nearly 2 months' raw materials inventory. Now the raw materials are not worrying at all, so there is no intention of buying raw materials in the short term.

Upstream raw materials are constantly being hyped, and downstream weaving enterprises simply do not buy it, which eventually leads to raw material prices. It can be said that this wave of market has been "fried".

Weaving order without disturbance


Polyester raw materials from the limit up to the limit of a week, "jump up and down", not bustling.


The weaving Market is just the opposite. No order is no order.


First, in July, this is the traditional off-season in the textile market. At that time, there was no order. Second, the rising trend of polyester stopped abruptly, and the raw material did not bring such a long and steady upward trend. It could not give traders and clothing enterprises a sense of urgency that they would not increase their prices. Third, the anticipation of the US order boom was not even seen.


Lv Zong, a home textile company in Wujiang, said that after the G20 summit, the American customers were still relatively calm, and there was not a large number of orders. This year, they are more cautious with their operations. Especially in May, the order of us customers did not advance in advance because of the tariff. Therefore, after the improvement of Sino US trade, there are not many orders placed in the market. It is estimated that time will be needed to confirm this positive effect.


Wu Jiangyi, principal of jacquard products, said that in the first half of this year, the volume of orders in the US was more obvious than that in the previous two years due to the tension between Sino US trade relations. The number of customers in the Middle East is increasing, and the list is relatively large. At present, the contact between American customers has not improved before, and the customers who have bought it have already bought it, while those with potential demand also need some time to find customers.


It can be said that the "order tide", which was originally conceived, did not arrive on schedule, and the market remained modest. However, in the interview, we also know that most of the cloth boss has already foreseen in this early stage, which has been fully prepared for this.


"Cut down production tide" really came.


During the visit, we learned that both the traditional textile clusters of Jiangsu and Zhejiang and the peripheral textile cluster such as northern Jiangsu, Anhui and Hubei had a certain scale of reduction and production plan in July.


Niu said that their enterprises now have two factories, and the old factory area has been shut down now. On the one hand, the overstock of inventory is too serious. On the other hand, the old factories are relatively old and unable to produce better quality products. Therefore, it is just in time to purchase new machines and carry out technological transformation to the factories.


Even if traders had hoarding goods before, some of the inventory had been removed by the weaving enterprises. However, because the market was in low season, the number of orders was very small. Almost all the cloth produced was equal to stock. According to past experience, this situation will last at least for more than a month.


There are 200 looms in Wujiang, and Zheng Zong, the chief textile operator of the down jacket fabric, reveals that the spot market is still very slow. The market demand of grade two and three is still very small. At present, the company's products are mainly exported to Keqiao, Beijing and Guangzhou. The market environment of Keqiao is also not good this year. Compared with the same period last year, the price of grey cloth has dropped by more than 1 yuan per meter.


In the case of market orders did not improve, under the pressure of high inventory, the rumors have been rumors of "cut down production tide" really come!


Is it good to restart trade negotiations between China and the United States? Yes! But for weaving enterprises, inventory, raw material prices, orders and funds are their lifeline. In the short term, the macroeconomic benefits can not bring tangible benefits, and the market exaggerates such news too much.


When the time came into July, the market had already entered the off-season, without the support of orders, most of the cloth bosses' funds were on the stock. The big guys wanted to copy the crazy market last year.