Polyester Filament Re Sealing, Price Rise, Low Demand, No Change, Careful Bottom Up.

The epidemic has deeply affected the global economy. As a textile industry, it has a deeper impact. But from February to now, the whole industry chain has not been deeply aware of the seriousness of this recession.

Rising prices, falling prices and rising prices are still welcome. The price increase in the first year is caused by a relative shortage of supply and demand, and the subsequent price drop is a true reflection of the reduction in orders. According to the survey of China Household Textile Industry Association, since March 18th, many export enterprises have received notice of delayed shipment from European and American customers, and some overseas customers have cancelled orders for nearly two months. With the proportion of textile enterprises decreasing production and the pressure of raw material supply exceeding demand, the market is doubtful about whether the chemical fiber weaving can survive the darkest April.

Since the news of Russia's resumption of oil trade negotiations this week, international crude oil has risen by more than 20%, and the polyester market has already reached a climax. PTA futures have risen sharply, and in the wake of lower buying sentiment, they have begun to make up their stocks. The production and sales volume of polyester factories has increased, and at 2 p.m. 3, the production and sales volume of individual polyester factories has reached 600%-1000%. The inventory was released well, and at the end of the week there was even news of the closure of polyester factories.

So what is the price increase now?

The real reason is the upstream self redemption of the lack of confidence in the future market. A kind of gamble that can rise and rise and cannot continue to fall. After panic, the market will face a longer "ice age".

To see that McKinsey's global economic forecast for this year and the next 2 years is basically negative growth, and JPM economic data forecast: GDP: global negative growth -2.6%; us -5.3%; euro area -3.4%; Japan: -3.1%; China's growth by 1.1%; India 2.1%; in addition to the low unit growth rate in Asia, other regions are negative growth.

Let's take a look at the reduction of foreign trade in Guangdong in 2020 of 1-2. The 100 billion, the next 3, 4 and 5 will be worse but not for the short term.

Despite the high rate of return to industrial enterprises, the utilization rate of capacity is low (for example, the automotive industry is only 40%; coal consumption in power plants decreased by 20% in March), and demand may decline. (exports in the second quarter are expected to fall by more than 20%). At the same time, due to travel concerns, travel after reemployment is still reduced, employment and income will be affected, which will further lead to a decline in consumption, and the decline in consumption will directly affect the growth of domestic demand.

From the downstream weaving manufacturers, after resuming work, it has been difficult to receive orders, and production and marketing are difficult to smooth, resulting in a continuous increase in inventory. From the monitoring enterprises, at present, the inventory of textile fabric has increased to 41-42 days in the Jiangsu and Zhejiang provinces, which is about 7 days higher than the 35 days in the same period of last year. It is approaching the maximum inventory of 42-43 days during the off-season.

Grey cloth is money, can not sell, money is pressed in the warehouse, but looms are still in production, which makes weaving manufacturers really pressure mountain, so many enterprises choose to leave in April, reduce the cost of enterprises.

For polyester enterprises, the overdraft of inventory is the anxiety of the market. Since the beginning of February, the word "copy the bottom" has become a topic in the downstream of polyester. It has been actively engaged in the "bottom hunting" army, whether traders or grey cloth factories. Some people are looking at the "opportunity" and stockpiling goods. What is unexpected is that overseas public health incidents are becoming more and more intense, which further dragged down the purchasing power of the market, and polyester began to slide down the cliff.

A lot of downstream purchases have only been paid for deposits, and they have not been able to come and take delivery. Pet enterprises are worried that they are afraid that the price will go down sharply, so that many enterprises will have plenty of stocks, but they will not be able to make any stock.

For grey fabrics and traders, a lot of stockpiling is a risk. After investigation, there are 15-45 days' raw materials in the early stage of the grey cloth factory, and on the basis of the loss of foreign trade orders and the scarce domestic trade orders, the pressure of business operation has increased dramatically. The mass production operation has increased the pressure on production and operation, and the contradiction between production costs and enterprise funds has been highlighted.

On the other hand, the bulk of the stock on Thursday did not reflect "precaution". The real price of the second day did not rise on schedule. If a large number of goods were stockpiling, the risk could be faced with "no price, no market" in the short and medium term.

As domestic demand and foreign trade continue to sink and it is hard to recover in the short term, the reduction of demand for end users has become an irreversible fact that the weak chassis can no longer sustain the driving force of price increases. According to the prediction by medical professional organizations, the outbreak of the epidemic in the United States should be at least in mid April. As long as the US epidemic is not in the extreme pressure position, the market panic will not reach the limit. The conversion time of the chemical fiber has not yet arrived.

From the polyester chain point of view, cash flow is uneven distribution, PX and PTA processing fees are ample, manufacturers have not lowered the negative expectations, that is, in the short and medium term will continue to maintain high inventory, high load mode, and as polyester direct downstream weaving factory, a large number of foreign trade orders loss, are fighting for the domestic market, the order is snatching fierce, profits continue to shrink. As a result, polyester filament continues to descend, and chemical fiber grey cloth is no exception.

The contradictory mentality that can not rise and not be willing to fall will directly lead to the vicious circle of real estate prices in this year or even next year.

For the downstream industry, how to deal with this situation?

1, deal with the price rise frankly, even if the price rises occasionally, it can not support for several days.

2, abandon the bottom line mentality to deal with the price decline, because this year's profit is never more important than cash flow.

3, combing the direction of customer structural adjustment to domestic demand and transformation of electricity providers.

4, enterprises that can not resume orders in the short term will give up production to substitute OEM so as to ensure reliable revenue and cost reduction.

For upstream polyester factories, we should have "abandon the illusion and face the reality and make preparations for crossing the difficulties together with the downstream". Without the demand support, we still want to follow the previous "three step, two step" pricing model.

The rise and fall of price can not change the size of demand. It is nothing more than the game of interest and the transfer of stock. In the short term, we must not blindly stock up to collect the bottom. There is nothing wrong with just stocking up. This "bottom" even if it is "bottom", the grinding time is also a long and repeated process. It is suggested that the warehouse be built in batches. The first half of 2020 is destined to be cold and hard.