From May 16 to 20, 2022, the China Printing and Dyeing Industry Association conducted a special survey on 6 key printing and dyeing industry clusters and 72 printing and dyeing and upstream and downstream related enterprises, especially data analysis on total profits. The results showed that about 83% The total profits of enterprises have declined, and 51.09% of enterprises have experienced a decrease in total profits of more than 10%.
The polyester sector has generally risen recently, with PTA and short fiber performing strongly, and PTA leading the rise in the chemical sector, with multiple contracts hitting their daily limits.
And it’s not just the raw materials that have skyrocketed! Judging from the survey, the prices of natural gas, steam, electricity and other energy sources have increased significantly. The steam prices of textile printing and dyeing enterprises in Keqiao District, Shaoxing City increased by more than 20% month-on-month in April, and electricity bills increased by an average of 14%; the steam prices of printing and dyeing enterprises in Wujiang District, Suzhou City increased by 5% month-on-month in March, remained unchanged in April, and increased by 10% month-on-month in May; The steam prices and electricity bills of Ningbo textile printing and dyeing enterprises have increased by more than 20%; the actual electricity bills of Hanchuan textile enterprises have increased by nearly 35% compared with November 2021.
In addition, the significant increase in logistics costs is also an important reason. According to the survey, the interviewed companies generally reported that orders were relatively sufficient in the first quarter, the production situation was basically good, and both revenue and profits improved. However, after entering April, most companies are facing the dilemma of insufficient orders. The current capacity utilization rate is generally maintained at 60 to 70%, and some companies are only about 50%. The operating efficiency of the companies has declined, and some companies have even suffered losses. Weak terminal consumption in the domestic market is also the main reason for the lack of orders from textile printing and dyeing companies.
The reality of cash flow losses is facing us
The surge is overdrafting expectations
Textile bosses can’t help but ask, will the cost prices of raw materials and other materials continue to rise? At least judging from the multiple benefits currently existing in the market, raw materials are still likely to rise in the future.
Judging from the prices of the main raw materials PTA and ethylene glycol, the price of PTA has reached high levels in recent years, while the price of ethylene glycol has also returned to normal levels in previous years. And against the background that international oil prices are expected to exceed US$140, there is still room for growth in PTA and MEG in the future. Supported by high costs, raw material prices are also expected to continue to rise.
However, from the perspective of the weaving market, since May, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang is still at 50-60%, and the load continues to operate at a low level. At present, in the domestic market, there are only a small number of European and American clothing orders in the second half of the year and new orders for home textiles. Domestic autumn clothing orders have been placed, but the quantity is limited. The overall market orders have declined significantly compared with the same period in previous years. Since June, some weaving production factories have been on short-term holiday arrangements. After the holiday, they have entered the traditional textile off-season. It is difficult for the textile and clothing market demand to grow in a short period of time. It is reported that as raw materials rise, some cloth merchants have slightly stocked up. However, looking at the subsequent high temperature season from June to July, expectations are still bearish, and the market atmosphere is difficult to stimulate. The inventory of gray cloth in the factory is still at a high level. Looking at June, It is still difficult to increase the weaving operating rate and load.
However, the sudden surge in raw material prices has gradually made it difficult for the downstream market to adapt! The excessive increase has made weaving more cautious about later procurement of raw materials. Coupled with the current weak increase in terminal gray cloth prices, the reality of downstream cash flow losses has been faced. The current increase is overdrafting future expectations. Once the rising trend of raw materials changes, then for the industry The chain will enter the negative feedback stage.
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