Foreign Trade Textile Orders Or Breakthroughs In Early June, The Polyester Market Waiting For The Next "Price Break Out War"!

Beginning in March this year, crude oil prices began to plunge straight after the beginning of the price war between the new crown and the oil producing countries. By April, there was even the first negative oil price in history. The price of polyester raw materials also began to fall below the historical minimum under the influence of oil prices, and the price of polyester raw materials continued to be low because demand has never been improved.

For polyester enterprises, the price of raw materials has always been in a low position whether from profit or inventory, which is not conducive to the production and operation of polyester enterprises. As a result, since April, the market has started to rise as soon as the market comes into trouble, but such a rise has been lacking in continuity.

The recent resumption of production in Europe and the United States has led to a sustained rebound in international oil prices. The polyester market also took advantage of this opportunity to break through the "low price trap", but this round of "price breakout" came to an end as the international price of oil began to fall.

Price can rise, oil prices may be an important factor, but the most important is terminal demand, and the recent demand recovery has encountered two bottlenecks.

1, foreign trade: global consumption "retaliatory" fears and expectations, spinning and weaving enterprises carefully ordered production

China's textiles have been "walking on two legs" in domestic trade and foreign trade, but the sudden outbreak this year has dealt a heavy blow to these two aspects.

Europe, as an important textile and apparel consumption area in the world, will enter the new stage of textile and clothing trade orders in the new textile and garment industry area, Southeast Asian countries. However, it is obviously not a fast process to resume work from some countries, lift up the port, resume free trade and warm up the consumption of residents. At the same time, in the middle of May, from the production cycle, the order of the future textile fabrics will be the main force in the end of the autumn and winter orders. Considering the domestic and global consumer retaliatory fears and expectations in the second half of the year, it will be regulated. Enterprises above the die will also be cautious in order to produce, and control the pressure of clothing inventory as far as possible under the background of economic downturn. Meanwhile, in February 12, 2020, at the plenary meeting held in Strasbourg, France, the European Parliament formally approved the adoption of the EVFTA agreement. Once the EVFTA agreement comes into effect, the EU will abolish the 85.6% tariff tariff for Vietnam, which is equivalent to 70.3% of Vietnam's exports to the EU. 7 years after the entry into force of the agreement, 99.2% tariff duties will be abolished, equivalent to 99.7% of Vietnam's exports to the EU. Textile and apparel products, as one of the dominant products of Vietnam's exports, will form a certain order competition and diversion to China's exports to the EU's textile and apparel products. After the global control of the health and safety incidents in the second half of the year, the export of Chinese textile and clothing will have a greater impact.

2, the hope is placed in foreign trade orders, but the market has entered the off-season.

It is now in late May. According to the rule of past years, orders for spring and summer fabrics have basically come to an end. The market is about to enter the off-season. As time comes to 9 and October, the fabric will start to occupy the market in the autumn and winter, and the market will become hot again. The consumption of textiles has a strong seasonal rule. After the season has passed, it is very difficult for them to have "revenge consumption" after that. Therefore, when the market enters the off-season, the demand is very difficult for a short time.

In order to more truly reflect the order recovery of polyester terminal industry, a platform has recently issued a special questionnaire survey on the order recovery situation for the polyester terminal industry, such as weaving, yarns, printing and dyeing, textile and garment, home textiles and other downstream production enterprises. According to the survey, the finished product inventory of all enterprises in the downstream stage is on the high side, and the order performance is not good. More than 70% of the research enterprises will place their hopes on foreign trade orders, and most enterprises believe that foreign trade orders will start to pick up in early or mid June.

(1) inventory status of finished products at present

According to the questionnaire, 32.4% of the research enterprises currently have finished product inventory level of 30-40 days, 23.5% of the finished product inventory level of the research enterprise is over 40 days, 17.6% of the finished product inventory level of the research enterprise is 10-20 days, 14.7% of the finished product inventory level of the research enterprise is 0-10 days, and the remaining 11.8% research enterprise finished product inventory level is 20-30 days. It can be seen that the overall inventory level of factories in the lower reaches is relatively high, and the inventory of finished products in more than half of research enterprises is more than 30 days.

(2) raw material inventory status of enterprises

According to the survey results, the raw material inventory of each enterprise concentrated in 10-20 days, accounting for 41.2%, followed by 30-40 days of raw material inventory, accounting for 20.6%, raw material inventory in 20-30 days of enterprises accounted for 14.7%, the remaining raw material inventory level of high and low differentiation, 0-10 days and 40 days above raw material inventory enterprises accounted for 11.8%.

(3) Order improvement

The results of the questionnaire showed that most enterprises' orders in May only showed 0-30% improvement compared with April. The specific data are as follows: the ratio of improving 0-10% is 38.24%, the proportion of enterprises improved by 10%-30% is 32.35, the proportion of enterprises with 30%-60% improvement is 17.65%, and that of 60%-90% improved is 8.82%, accounting for only 100% of the 2.94% improvement.

(4) anticipation of orders for all enterprises in June.

According to the questionnaire, according to your production link and understanding, it is estimated that there will be a "change" in June orders compared with May. 41.7% of the enterprises hold optimistic expectations, and think that the order will increase in June. However, 29.4% of the enterprises think that there will be a downward trend, and 23.5% of the enterprises hold a conservative attitude that they will maintain a stable trend.

(5) main factors affecting orders

According to the survey results, 70.6% of enterprises believe that the improvement of foreign trade orders will be the main reason for the different performance of the production line, and only 29.4% of the enterprises will place their hopes on the domestic trade orders.

(6) predict the time of improvement in orders.

In order to predict the time node of order improvement, different downstream businesses have different ideas. In the survey and research enterprises, the proportion of order improvement in early and mid June was 14.7% and 26.5% respectively. In addition, 32.4% of the enterprises believed that the improvement of orders would take longer.

To sum up, the release of the demand side of the polyester filament in the early stage is largely dependent on the release of favorable factors from upstream raw materials, thus stimulating the textile enterprises to make passive replenishment and replenishment. Under the formal recovery of the terminal orders, the polyester plant only shifts the inventory stage to the textile enterprises rather than the final consumers. From the perspective of the healthy transmission of the whole industry chain demand, the release of terminal demand will eventually drive the demand of the whole industry chain to pick up. Therefore, orders for terminal textile and garment, especially export trade orders, will be the most important opportunity to reverse polyester and textile industry in the future. As the important consumption place of China's textile and apparel industry, the European Union's recent resumption of work has been increasing, and it has become the primary focus of polyester chemical fiber market. The control of health and safety events in Europe and the United States directly determines the progress of recovery and consumption recovery of their enterprises, and directly affects their import and export trade.