I really don’t know how to do this business this year. How should I fix it? –Voices from textile bosses
Recently, the epidemic abroad has continued to ferment, resulting in the continuous cancellation of foreign trade orders in the textile industry. Many textile bosses are worried about internal and external worries. In addition to shrinking orders, falling raw material prices have also made textile companies anxious.
The current situation of polyester filament cannot be described with the word “miserable”.
For more than a month since work resumed after the new year, the price of polyester filament has been in a downward trend, and the focus of quotations of various manufacturers has been significantly reduced. Specifically, the price of polyester filament FDY products is around 5,500 yuan/ton, the price of POY products is around 5,000 yuan/ton, and the price of DTY products is around 7,200 yuan/ton.
As can be seen from the table, various polyester filament products The price dropped by nearly 2,000 yuan. Specifically, the price of FDY products dropped by about 1,870 yuan/ton from the previous month, a decrease of 25.44%; the price of POY products dropped by about 1,900 yuan/ton from the previous month, a decrease of 27.54%; the price of DTY products dropped by about 1,450 yuan/ton from the previous month, a decrease of 16.76% .
Some time ago, contrary to the falling prices of polyester filament, its profits continued to rise. However, in recent days, profits have also begun to decline, especially POY products, which have fallen into a loss situation. Compared with the same period last month, profits have plummeted by more than 100%! The price of FDY products has also dropped by nearly 90%, and only DTY still maintains relatively high profits among the three products.
Polyester filament is one of the important indicators of the direction of the textile market. The current decline has hit the market confidence that was already on the verge of collapse. . The trend of polyester yarn continues to decline, which is inseparable from its own inventory, cost-end PTA, and downstream demand.
01 High inventory level
The most commonplace thing is the polyester itself Inventories have reached historical highs, and high inventories have inhibited the rise in polyester filament prices.
According to statistics from China Silk Capital Network, the overall inventory of the polyester market is now concentrated at 34-45 days; in terms of specific products, POY inventory is at 28-35 days. FDY inventory is around 29-36 days, while DTY inventory is around 34-45 days.
02 Cost collapse
PTA, as one of the most important raw materials for polyester filament, forms an effective cost support for the price of polyester filament. However, starting from the end of the year, affected by various negative factors such as the plunge in crude oil and the turbulence of global stock markets, PTA futures came under obvious pressure and the price plummeted.
At present, the internal price of PTA is around 3,240 yuan/ton, which is nearly 1,000 yuan lower than the same period last month. And we all know that in fact, the price of PTA has been falling since last year, and now it is close to its lowest price. With the cost collapse, it is naturally difficult to support the price of polyester filament.
03 Shrinking demand
The tradition of “gold, three, silver and four” The textile peak season is difficult to reflect this year. When the market first resumed, domestic trade orders remained sluggish due to slow logistics recovery and low worker attendance rates. Coupled with insufficient market demand, weaving companies were underoperated.
Now, the foreign trade market is severely hampered due to the ongoing epidemic. Many export orders have been canceled and some orders have been suspended, which has seriously affected market confidence. Recently, polyester production and sales have continued to be sluggish, with average production and sales only maintaining at 30-50%, and it is difficult to break through.
When the current situation of polyester yarn is worrying and the market is bullish and bearish, the load has been rising continuously recently. This Why exactly?
The market lags
When the market just resumed, polyester The factory operating rate has improved significantly. The most important reason is that the market has just resumed and the market is lagging behind.
A few years ago, due to the continuous decline in polyester filament prices, polyester factories decided to limit production and protect prices, which greatly reduced the operating rate. Coupled with the Spring Festival holiday, the operating rate has not improved. After the year, the market began to slowly resume work, and the load of polyester yarn began to slowly increase. Although the market demand has shrunk, the market lags behind and is not yet obvious. Therefore, the load of polyester yarn is almost the same as that of the same period in previous years.
Market Confidence
Recently, the polyester filament load is around 74.7%, which is only an increase of 0.5% from last week. At this time, the market situation has been confirmed by most textile people.”Blacklisted”, the falling price of polyester yarn has made weaving manufacturers choose a wait-and-see attitude towards raw materials.
Confidence is more important than gold. If polyester manufacturers choose to reduce production at this time, it will inevitably undermine market confidence. Therefore, even if their inventory has reached a historically high level, they cannot reduce production at will. On the contrary, if you add a little bit of work occasionally, no matter whether there is “moisture” or not, it can at least stabilize the morale of the military. Of course, the cost of shutting down polyester factory machinery is also very high, and the market may improve when the situation improves.
As far as the current situation is concerned, polyester factories are actually “holding on”. Prices and profits have shrunk severely, but polyester manufacturers have chosen to increase operating rates, which is not easy.
According to the latest news, outside of China, the number of confirmed cases of the new coronavirus worldwide has exceeded 500,000, and the number of confirmed cases in the United States has exceeded 100,000, quickly approaching the “epicenter” of the global epidemic. If the foreign epidemic cannot be basically controlled in a short period of time, it will be the biggest negative for the polyester market and the textile market.
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