This week! Crude oil collapsed, polyester yarn dropped another 400, the Federal Reserve raised interest rates in July, and 618 sales fell short of expectations…
Let’s take a look at what’s new this week!
Polyester drops another 400!
On June 23, polyester factories generally lowered their polyester yarn quotations:
The price of polyester filament from a major factory in Zhejiang has been reduced by 200-300, with semi-gloss POY75/36 quoted at 8850, semi-gloss FDY30D/24F quoted at 12350, and glossy FDY50/36 triangular quoted at 10600;
The polyester filament price of a large factory in Tongxiang has been reduced by 400. Semi-gloss POY75D/36F is quoted at 9410, 75D/72F is quoted at 9460, semi-gloss POY75D/36F is quoted at 9410, 75D/72F is quoted at 9460, DTY75D/36F low elasticity is quoted at 11410, 75D/72F Qingwangbao 11610;
A polyester factory in Jiangsu lowered its price by 400, with semi-gloss POY 75D/36F quoted at 9310, 75D/72F at 9360, 150D/144F at 8960, and 150D/288F at 9010. (Unit: Yuan/ton)
The editor has something to say: This year’s market situation has determined that it will be difficult for weaving companies to stock up on raw materials in large quantities, and it is more likely to continue to reduce the operating rate of looms. The large inventory of polyester cannot be solved, and the scale of production shutdowns and maintenance may be expanded in the future.
The Fed may raise interest rates again in July
According to the Chicago Mercantile Exchange Group’s (CME) “FedWatch” tool, as of June 20, the probability that the Federal Reserve will raise interest rates by 75 basis points at the July policy meeting is as high as 99.5%, and the probability of raising interest rates by 100 basis points is as high as 99.5%. is 0.5%, while the probability of raising interest rates by 25 and 50 basis points is both 0%.
Traders expect that the probability that the Federal Reserve will raise interest rates by another 75 basis points in July is higher than 90%; the rate hike will reach 2 percentage points in the next three months, which is the most aggressive interest rate hike stance since 1982.
The editor has something to say: The impact of the Federal Reserve’s interest rate hike on Chinese textile companies is mainly reflected in two aspects, one is the RMB exchange rate, and the other is the price of bulk raw materials.
Sales during the 618 Shopping Festival fell short of expectations
The sales volume of this year’s 618 Shopping Festival was lower than expected, and there was no boom in return orders in previous years. This year’s national sports trend led by Liu Genghong alone caused the sales of women’s sports T-shirts, sweatpants, etc. on the JD.com platform to increase by more than ten times year-on-year during the 618 period.
The gray fabric end, which is closely related to clothing, does not seem to be affected by this and is equally popular, maintaining a stable operation in a tepid manner. The fabric market last week showed a “slight increase in volume and price”, mainly reflected in casual high-elastic fabrics, because sportswear like these requires good stretch and a certain degree of wear resistance, and the clothing will have good elasticity Generally, some elastic chemical fiber fabrics are used, but only a small number of manufacturers have strong sales, while most manufacturers have average sales.
The editor has something to say: According to the rules of previous years, most sales peak during the 618 event, but this year it failed to drive domestic trade demand.
crude oil crash
In this week, crude oil prices fell by 8%. PTA futures even fell by 134 yuan/ton. As the source product of bulk commodities, crude oil will inevitably be negative for chemical products once it plummets or drops to the limit. Affected by this, both bulk chemicals and our textile industry chain are in a precarious situation.
The editor has something to say: Now with insufficient downstream demand and insufficient upstream support, polyester prices are falling like the last brick being pulled from the edge of a cliff.
Market review
Polyester:
In terms of PTA, the price of PTA has plummeted this week, and the current mainstream quotation of PTA is around 7,000-7,100 yuan/ton. As the Federal Reserve raises interest rates and international oil prices fall, PTA follows the decline of international crude oil. In addition, the downstream weaving industry has downward purchasing pressure. It is expected that the PTA market may continue to fluctuate and weaken.
In terms of ethylene glycol, the price of ethylene glycol began to fall this week, and the current mainstream quotation is between 4500-4600. The overall fundamentals of ethylene glycol are poor, and downstream demand is insufficient, leading to an increasingly serious oversupply situation, and the overall future trend is bearish.
In terms of polyester filament, the price of polyester filament fell sharply this week and encountered Waterloo. The main reason was due to the collapse of upstream crude oil prices. In the absence of strong support on the demand side, polyester filament followed the cost fluctuations. Downstream users mainly need to replenish goods, and promotions have increased. The overall production and sales of polyester filament are still not high.
The profit margin of PX this week dropped slightly from last week, and its current profit has dropped to US$248/ton. In terms of PTA, its losses expanded this week, and its losses are currently around 254 yuan/ton. In terms of ethylene glycol, the loss expanded this week, and the current loss is US$207/ton. polyesterIn terms of polyester yarn, the price of polyester yarn plummeted this week due to the sharp drop in cost. The price of polyester yarn products fell relatively slightly, and profits increased; the loss of FDY150D dropped slightly, and the current loss is 83 yuan/ton; the loss of POY 150D dropped slightly, and the current loss is 53 yuan/ton. / ton; DTY 150D due to strong POY price, profit loss is currently at a loss of 19 yuan / ton.
In terms of operating rate, the average operating rate of PTA was 70.2%, an increase of 0.8% from last week; the real-time operating rate was 71.6%, and the real-time effective operating rate was 80.2%. In terms of polyester, the average polyester load was 84.8%, an increase of 0.3% from last week. Currently, production costs are relatively high, resulting in weak profits, limited orders, and weak incentives for manufacturers to produce. The recent weaving operation rate is around 66.5%.
In terms of production and sales, crude oil prices continued to fall this week, terminal orders were deserted, market trading atmosphere was light, and polyester production and sales continued to be sluggish. Only on Thursday, the factory had many discounts and promotions, and production and sales improved slightly. Production and sales average around 40%.
In terms of inventory, according to statistics from Silkdu.com, the overall inventory in the polyester market is now concentrated at 27-30 days; in terms of specific products, POY inventory is around 26-31 days, FDY inventory is around 21-27 days, and DTY Inventory lasts about 25-27 days.
Weaving:
It can be seen from the Shengze Index of the Ministry of Commerce that the operating rate of downstream weaving enterprises remains volatile and stable. At present, the off-season atmosphere is strong and production costs are high, resulting in weak profits, limited orders, and weak production enthusiasm of manufacturers. Therefore, the startup rate is low, at 66.5%. This week, the market’s order-taking atmosphere has declined, and traders’ enthusiasm for stockpiling has also begun to decline. Therefore, gray fabric inventory has rebounded to about 35.5 days.
Printing and dyeing:
This week, the quantity of gray fabrics entering warehouses was basically the same as last week. Printing and dyeing enterprises reported that the overall number of orders received was average. With the arrival of the off-season, domestic sales orders are being placed sporadically, while orders for foreign trade are still narrowing. In the early period of 6.18 e-commerce brand sales, no replenishment orders have been received, and the sales have been halved compared to last year’s e-commerce festival. This week, most printing and dyeing factories have a sluggish order-taking atmosphere, and the operating rate of printing and dyeing factories remains at 56%.
In terms of delivery time, the quantity of gray fabric entering the warehouse is small, and the general delivery time is about 4-5 days, while some busy manufacturers require more than 7 days.
Outlook
Polyester prices have fallen sharply this week, and as the temperature rises, the textile market has slowly entered the off-season. In the next two months, it is believed that polyester factories will lose support on the cost side and the demand side will not recover. Choosing maintenance and production reduction to “protect prices”, in the short term, we still have to wait patiently for the market to recover.
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