Yarn, Polyester And Grey Fabrics Are Rising In Price! Downstream To "Bottom"?

After the Spring Festival, the epidemic of new crown virus pneumonia continued, while the textile raw materials rose against the market.

1, according to feedback from some enterprises in Shandong, Hebei and Jiangsu and Zhejiang provinces, less than a month since February 10th, the domestic conventional yarn has risen by 200-400 yuan / ton, and individual high quality and high count combed yarn has risen by nearly 1000 yuan / ton.

2, according to the Jiangsu and Zhejiang polyester factory quotations show that 3 days ago, some mainstream manufacturers of polyester prices took the lead, as of 5 days, some polyester varieties rose 100-200 yuan / ton.

What's the reason for the rise in price after a long holiday?

In late January, with the spread of the new crown pneumonia epidemic in China, the decline in China's crude oil demand triggered a sharp decline in international crude oil prices, coupled with an increase in US crude oil inventories, making oil prices lingering at the bottom. In the previous stage, Saudi Arabia advocated that the expansion of production cuts affected oil prices. Cut production "suspense" affects the market nerves, and the international crude oil bottoms up.

Crude oil, as a crude oil product in polyester market, has a cost driving effect on polyester products. When crude oil rebounded, the price of polyester filament was basically in a state of "price free market" at the same time when crude oil rebounded, but this time, downstream traders were also eager to make preparations for low price. Continue to burn up the price.

But is this market sustainable?

1. The increase in inventory caused by the increase in start-up rate has become a "stumbling block" for price rise.

With the acceleration of resumption of production and rehabilitation in addition to Hubei and Wuhan, the start-up rate of textile enterprises has gradually increased and market supply has increased. In March 5th, the head of a medium-sized textile enterprise in Dezhou, Shandong, said that the factory mainly produces 21S, 32S and combed 32S, and its capacity has recovered about 50%. The inventory of finished goods is steadily increasing due to the reasons of transportation capacity and orders.

Similarly, in February, due to the weak demand for the downstream, polyester stocks continued to increase, and the start-up rate of polyester factories was gradually increasing. At the end of February, the capacity of 2 million 100 thousand tons / year was restarted, and the installed capacity of the new plant was 250 thousand tons / year.

Among them, 7 sets of polyester filament devices have been restarted. At present, the running rate of PET filament device is 66.06%. The rise in inventory caused by the increase in start-up rate has become a "stumbling block" for price rise. In addition, in recent years, the government has introduced a number of tax exemption and fee reduction policies to encourage enterprises to resume production and resume production capacity as soon as possible. The effect is obvious, but because the business system has not yet fully recovered, the enterprises that have made rapid progress in production have a bigger future.

2, supply and demand are gradually saturated, grey cloth rising temporarily ended.

2 most of the grey cloth market has risen rapidly since the middle of last month. According to the feedback from traders in Shengze, affected by the epidemic, the capacity of weaving enterprises was low after a year, resulting in a shortage of grey cloth. In particular, some best-selling varieties, such as imitation silk, T400 and so on, many traders have hoarding goods. Data show that since mid February, most categories of grey fabrics rose by 0.2-0.4 yuan / m, and individual gains were even higher. The rise of grey cloth directly promotes the rise of yarn. However, with the increase of grey cloth production capacity, the supply and demand are gradually saturated, and the gray fabric has been showing signs of weakness, and even some of the weaving mills have been selling at a low price recently, which brings great pressure to the yarn.

In addition, despite the slight improvement in polyester Market shipments in recent years, most of them are stocking at low prices while downstream weaving is generally performed. Although the domestic epidemic has been effectively suppressed, the demand for raw materials is insufficient, and the workers in weaving mills are slow to go to work. The actual demand is still relatively low. At the same time, the habit of hoarding before weaving is still widespread before the Spring Festival, and the average stock of raw materials that enterprises can produce is still more than half a month old. Therefore, the market mentality of the epidemic is at a loss, the middle and lower reaches are mostly wait-and-see, the mentality is hard to sustain, and the market volume is basically small. Therefore, there is a lot of wait-and-see atmosphere in the raw material market of the weaving Market. The manufacturers say that the market is still uncertain and the wait-and-see mentality is the main factor.

3, the lack of orders is the biggest drag on the rise.

The textile market is still determined by the terminal order, and the order of the terminal is deficient, and the purchasing strength can not keep up. At present, the prosperity and price rise of the textile market may be just a flash in the pan.

As the largest clothing wholesale market in China, the thirteen lines of Guangzhou and Sijiqing are also closed down under the influence of the epidemic. It is reported that thirteen lines in Guangzhou and Sijiqing in Hangzhou have not yet been restored to normal. On the more than 20 days that postponed, sales opportunities for spring sales were reduced by 1/3. "Even if the market is open, there will not be many people who will take the goods for the time being. This year, it seems necessary to prepare for less business." A clothing store lady said.

From the consumer's point of view, until the end of the epidemic, many people's consumption concept will also change. Clothing is a necessity, but in front of the epidemic, it seems that clothing is not so important. Safety needs are the top priority, such as masks, disinfectants, and food expenses. The consumption of clothing will probably not recover for a long time.

Moreover, in recent years, South Korea has entered a high alert, and the epidemic in Europe has also deteriorated. Consumer demand in these areas will also change, and will also affect the order of foreign trade enterprises.

According to many traders in Shandong, Hebei and other places, the rise in yarn was mostly "empty" and the actual turnover was very small. Recently, textile enterprises have not received the order very well. Large factories still have a small number of new ones. At the same time, affected by the spread of the epidemic in the world, the domestic and international cotton prices fluctuate greatly, so that the yarn quotation of enterprises is lost. In March 5th, the global epidemic became more and more serious. Terminal consumption was hit hard. Many international orders were cancelled and destroyed. It is expected that the order of textile enterprises will continue to decrease in the near future.

4, the "OPEC+" negotiations failed completely, crude oil futures fell sharply.

On the other hand, the expected oil price reduction agreement has changed again. As Russia refuses to accept the OPEC's deeper cut in production agreement, the OPEC+ negotiations have been completely blown off. As a response to the Russian decision, OPEC announced that it will abolish its own restriction on output completely, and the panic in the oil market losing control and supporting quantity in the disorderly stage has spread rapidly. In the case of crazy selling, crude oil futures in Europe and the United States fell sharply. The external market time in March 6th WTI, April crude oil futures fell 4.62 U.S. dollars, or 10.07%, the largest single day decline since November 2014, at 41.28 U.S. dollars / barrel, the lowest closing price since August 3, 2016.

Brent crude oil futures fell $4.72 in May, or 9.44%, at 45.27 U.S. dollars / barrel, the lowest since June 22, 2017. Some analysts commented that if the new crown pneumonia virus broke through the bottom of the long term stable crude oil prices, then the breakdown of the negotiations will lead to a new round of crude oil price crisis.

To sum up, although the domestic textile enterprises have already returned to work quickly, due to the lack of orders and high inventory pressure, most textile mills can not achieve full load production. Under the pattern of oversupply, any part of the delay will resume the progress of the whole industry chain. With the gradual release of the national epidemic control and control, the recovery rate of the polyester market will also accelerate. But once again, the optimism of the international oil market has turned to pessimism, and the short-term market price has not been boosted. It is expected that the stock market will mainly be in stock in the first half of March. (source: Textile observation, network)