Abnormally high temperatures have continued across the country this week, and drought has led to a shortage of hydropower across the country. Zhejiang printing and dyeing companies have launched a price war, and the RMB exchange rate has once again exceeded the 6.8 mark…
Next, let’s look down to understand the market dynamics of the week.
High temperatures persist and industrial power consumption is limited
According to statistics from the Central Meteorological Observatory, since July 21, high temperature weather above 40°C has affected 12 provinces (cities), affecting an area of approximately 1.07 million square kilometers. During this period, the daily maximum temperatures at 155 national meteorological observation stations reached or exceeded historical extreme values. .
And due to the hot weather, air conditioning has become an indispensable equipment in order to protect the health of residents, and residents’ electricity consumption has increased significantly. The country adheres to the people-oriented principle, and industrial electricity needs to give way to residential electricity, which makes factory power even more tense.
The editor has something to say: If the temperature is too high, workers will not be able to hold on.
The yuan breaks through the 6.8 mark again
The RMB exchange rate has continued to depreciate since March, and the onshore USD/RMB exchange rate has depreciated from 6.30 to around 6.77, and even broke through the 6.80 integer mark in May.
By August, the exchange rate was once again approaching the 6.80 mark.
On August 15, the central bank lowered its policy interest rate beyond expectations. On August 15, the central bank launched a 400 billion yuan medium-term lending facility (MLF) operation (including the renewal of the MLF expiration on August 16) and a 2 billion yuan open market reverse repurchase operation. The winning interest rates for medium-term lending facility (MLF) operations and open market reverse repurchase operations are 2.75% and 2.0% respectively, both falling by 10 basis points.
The editor has something to say: This time, have you settled the exchange?
Printing and dyeing enters buyer’s market
According to data from the National Bureau of Statistics, in the first five months of this year, 588 of the 1,684 printing and dyeing enterprises above designated size suffered losses, with a loss rate of 34.92%, a year-on-year increase of 4.46 percentage points; the total loss of the loss-making enterprises was 1.535 billion yuan, a year-on-year increase of 42.24%.
According to data from the National Bureau of Statistics, from January to May this year, the output of printed and dyed fabrics by enterprises above designated size in the printing and dyeing industry was 22.135 billion meters, a year-on-year decrease of 4.67%, and the decline was 3.26 percentage points larger than that from January to April. Affected by the epidemic, sluggish terminal consumption is the main reason for the expansion of the decline in printing and dyeing fabric production. From January to May, the retail sales of clothing, shoes, hats, and knitted textiles in units above designated size fell by 8.1% year-on-year, and the decline expanded by 2.1 percentage points from January to April. Online retail sales of physical clothing products fell by 1.6% year-on-year.
The editor has something to say: There is excess printing and dyeing production capacity and it has entered a buyer’s market.
Container freight rates fall for ninth consecutive year
The latest Shanghai Container Freight Index (SCFI) was 3562.67 points, down 177.05 points from last week, hitting a new low since June last year, with a weekly decrease of 4.73%, and falling for the ninth consecutive week. The four major long-haul routes fell simultaneously, with the US East Line and US West Line falling more sharply.
Public data shows that, unlike the market freight rates that continued to rise after the end of March last year, container freight rates rose slightly from the end of April to early June this year and then entered a downward range again. However, due to port congestion still prevailing, the month-on-month declines were maintained. below 5% level.
The editor has something to say: Shipbuilding was crazy in the past two years, and after the surge in shipping capacity, there was also a surplus.
Market review
Polyester: This week, international oil prices fell first and then rose. At this stage, the oil market is facing concerns about a global recession, and investors are weighing the impact of factors such as declining U.S. inventories, rising Saudi production and exports, the prospect of Russia increasing production, and the resumption of negotiations on the Iranian nuclear deal, and the fluctuations are relatively obvious. As of the close on Thursday (August 18), the price of light crude oil futures for September delivery on the New York Mercantile Exchange rose $2.39 to close at $90.50 per barrel, an increase of 2.71%; London Brent for October delivery Crude oil futures prices rose $2.94 to close at $96.59 a barrel, an increase of 3.14%.
In terms of PTA, the price of PTA rose first and then fell this week. The current mainstream quotation of PTA is around 6,000-6,100 yuan/ton. This week’s power shortage has reduced the supply of PTA, driving up PTA prices. However, the current downstream demand is not good, and the PTA operating rate continues to decline. It is expected that the PTA market will remain stable in the future.
In terms of ethylene glycol, the price of ethylene glycol fell slightly this week, and the current mainstream quotation is between 3900-4000. The overall fundamentals of ethylene glycol are poor, downstream demand is insufficient, and the overall future trend is bearish.
In terms of polyester filament, the price of polyester filament has remained stable this cycle. The price of crude oil has been relatively volatile this week, and the price of PTA has remained stable.The price of polyester filament has been relatively strong this week, so while the downstream demand has not improved significantly, the price of polyester filament has been relatively stable this week.
In terms of profits, PX’s profit margin increased slightly this week compared with last week, and its current profit has risen to US$157/ton. In terms of PTA, its losses narrowed this week, and its losses are currently around 71 yuan/ton. In terms of ethylene glycol, the loss narrowed this week, and the current loss is US$202/ton. In terms of polyester filament, the price of polyester filament remained stable this week as the cost side remained stable, and the price of polyester products also remained stable, so the profit did not change much, and the profit dropped slightly; FDY150D profit fell slightly, and the current profit is 134 yuan/ton; POY 150D profit slightly has declined, and the current profit is 110 yuan/ton; the profit of DTY 150D has increased slightly, and the current profit is 139 yuan/ton.
In terms of operating rate, the average operating rate of PTA was 68%, an increase of 0.33% from last week; in terms of polyester, the average polyester load was 80.61%, a decrease of 0.86% from last week. Due to many high-temperature manufacturers taking holidays this week, combined with the impact of power cuts in most domestic textile and weaving bases, the overall enthusiasm for starting work is poor. The recent weaving operation rate is around 57.2%.
In terms of production and sales, polyester filament is running weakly this week, and downstream users just need to purchase. Polyester filament trading is light, and production and sales during the week are mostly 30-50%.
In terms of inventory, according to statistics from Silkdu.com, the overall inventory of the polyester market is now concentrated at 25-29 days; in terms of specific products, POY inventory is at 25-29 days, FDY inventory is at around 19-28 days, and DTY The inventory lasts for about 23-28 days.
In terms of weaving: the operating rate of downstream weaving enterprises dropped slightly. There are many high-temperature holidays, coupled with factors such as orderly electricity consumption and still insufficient orders, the operating rate dropped to 57.2% this week. A small number of market orders were released this week, and traders were less enthusiastic about stocking up. Therefore, gray fabric inventory rebounded slightly to about 37.2 days.
In terms of printing and dyeing: this week, the number of gray fabrics entering the warehouse decreased compared with last week. Printing and dyeing enterprises are affected by power restrictions, high temperatures and insufficient downstream orders, resulting in an increase in work stoppages and rest breaks. Therefore, the operating rate of printing and dyeing plants this week dropped slightly from last week to 47.5%. In terms of delivery time, although the factory has reduced production, the quantity of gray fabric entering the warehouse is not large, and the overall delivery time has little impact. It is slightly extended by 1-2 days. The general delivery time is around 5-6 days, and some busy manufacturers have It takes more than 7 days.
Outlook
The sustained high temperature has affected the normal production of enterprises, the economic environment is not good, and there is a general sluggish demand around the world. The weather forecast shows that the temperature will finally start to cool down next week. I hope that the market conditions during the “Golden Nine and Silver Ten” will give textile people a surprise.
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