Sino US Trade Is Good, And Polyester Market Is Grinding. Will The Weaving Market Usher In Orders At The End Of The Year?

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On December 13th, the Information Office of the State Council held a news conference to introduce the progress of Sino US economic and trade consultations. At the press conference, the Chinese side said that as the two sides reached the first stage agreement, the United States has promised to cancel part of the tariffs on China's products and impose additional tariffs, and increase the export of Chinese products to the United States.

The news is undoubtedly a great benefit to the textile market. After several days of continuous fermentation, many market participants are particularly concerned about the impact of this news on downstream enterprises. In fact, its impact is a gradual process. At present, the downstream weaving enterprises are changing in a delicate way.

Can we welcome the "stocking tide" of weaving factories?

After the Sino US trade news, upstream raw materials ushered in a wave of rise, and this time encountered the weaving enterprise "routine business" at the end of the stock market, this wave of the rally continued. In view of the plan announced by the polyester factory, in order to get rid of inventory, this year's polyester factory overhaul will be greater than in previous years. Therefore, the good news of Sino US trade has played a certain role in promoting the purchase of raw materials by weaving factories. In this way, the weaving factories may increase the stock of raw materials, and estimate the increase of 3-4 days. According to last week's China silk net survey, it was learned that most of the weaving factories expected that the amount of raw materials stocked for 30 days could now be extended to 33-34 days.

01

Lack of funds to do what we can

A lot of stockpiling materials must be based on sufficient funds on hand, but for this year's weaving factories, capital turnover is a more difficult year. In the doldrums, credit debt is getting worse and worse, and the period of arrears is basically 1-3 months. At the end of the year, all kinds of accounting expenses were cleaned up. When the receivables had not yet been received, the funds of the manufacturers were particularly intense.

02

Overcapacity, not blind production

Moreover, this year's weaving market has shown a surplus of production capacity and is still continuing to ferment. This problem is the crux of the textile market downturn. Many weaving enterprises have begun to pay attention to it, and are trying to change the status quo. The decline of loom starting rate is a reflection of weaving factories in order to reduce production capacity. Large quantities of raw materials for blind production can no longer exist. Most enterprises have the attitude of buying and using. However, in order to prevent the price rise of raw materials after a year, it will be properly stocked.

Can we welcome traders' stocking tide?

It is said that this year's sluggish textile market is due to a reduction in the overall export of garment fabrics due to the Sino US trade war. For example, in Shengze, a company that made Oxford cloth received a large 150 thousand meter bill in 3 and April this year, but in May the customer cancelled the order due to customs duties. The order from the downstream enterprises reflects the fact that Sino US trade war does have an impact on enterprise orders. After the release of good news on Sino US trade, there will be substantial improvement in fabric orders next year. And now at the end of the node, stocking is the annual routine operation. Traders may relax their vigilance for stocking, increase their stocking volume appropriately, but predict the maximum increase by 1 weeks.

01

Stocking caution in high inventory prices

Despite the constant easing of trade wars between China and the United States, the impact of the increase in textile market next year and the increase in the volume of enterprise orders is unknown. So many stocks on the market are stacked without digesting, which is the biggest "time bomb". Next year, once a manufacturer throws a large area and the market price will fall down, the price of the trader will not have the competitive advantage, and the stock will become the stock. If the price is low, it will end in a loss. This is the reason why most traders dare not make a lot of stock.

02

There is no market for next year.

In addition, the textile market at the end of the year did not meet the expected "rush tide". Traders are not confident about the good market next year. For example, this year's Oxford cloth market has been greatly suppressed by trade friction between China and the United States. Tao Wei, the head of a textile trade enterprise, said that 2 American brands had been suspended this year, but the cloth had been woven, but the list was suspended indefinitely. Traders' confidence in the market has been weighed down because of the disruption brought by Sino US trade frictions. Based on the above two reasons, it is unlikely that Sino US trade incentives will stimulate traders to make large quantities of stock.

Can stocking reduce the decline of weaving machines?

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Since the end of November, there has been a "cooling" signal in major textile clusters, and the rate of start-up has declined. At present, the average loom rate of looms in Shengze is concentrated in the vicinity of 8, and the water looms in Changxin are maintained at 7-8. In Changshu and Haining, the warp knitting rate is around 7, and the opening rate of the Shaw machine is about 5-6. Can the suppression of weaving machine loom rate decrease after the good news of Sino US trade?

　　 Xiaobian's answer is No. This year, because the market is not booming, weaving mills are not as good as expected, so stocks are on the rise. Prices are also subject to double pressures from raw materials and demand. According to the monitoring of China's silk net, the inventory of grey fabric in Shengze has been at a high level for about 38 days in December. The inventory of individual stocks with high inventory has reached 2-3 months, or even more than half a year. The same period last year was about 30 days. Under the pressure of high inventory, manufacturers have to reduce the load by reducing the start-up rate.

　　 Can stocking drive the speed of fabric and fabric?

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Now the market is still not satisfactory, the market orders have come to an end, but foreign trade orders are still mediocre. At present, the whole printing and dyeing period in Shengze is between 7-10 days, so it can be said that the shipment is smooth. In the past year, the dyeing factory will send out the news of the explosion. Traders rush to the last batch of goods before the Spring Festival, but most of the dyeing plants do not live much this year. The VAT operation starts at about 8 per cent, and a small number of dye factories burst. And the fabric inventory of weaving factories is also increasing little by little.

　　 From the market perspective, the release of Sino US trade benefits has not directly affected the downstream market. In fact, for the downstream industry chain which is in the end, it is very little to directly promote the order of enterprises. The time of the Spring Festival holiday is getting shorter and shorter. The order of the original terminal customers has also come to an end. Besides, the stocking of downstream traders is also a process of buying in succession, and for the grey market with huge volume, the stocking of small batches is not big for splashing water in the market.

afterword

To sum up, Xiaobian believes that the easing of trade relations between China and the United States has a certain impact on downstream textile enterprises. In particular, the enthusiasm of enterprises to purchase orders and stocking has been improved. No matter how the good news stimulates the market, the enthusiasm of textile people is enhanced. Do we need such a "strong heart" for this year's sluggish market?