1. The price dropped by 2,500 yuan/ton in a week. Will the building covered with spandex collapse again? (Hot: ★★★★★★)
Since September, the trend of spandex has begun to weaken. As the overall downward trend of downstream weaving operations has become more obvious, demand has weakened, and supply has eased, the market price of spandex has indeed declined to varying degrees. Especially since November, with the collapse of crude oil prices, early speculation has gradually subsided, and spandex has become the largest decliner in the chemical fiber industry chain. Comparing the madness in the previous stage, it can be said that I saw him building a tall building and seeing it collapse!
In the process of upstream and downstream game, it remains to be seen whether the textile and clothing terminal consumption can be started. Regardless of the cost side, the current change in demand is the most critical factor affecting the trend of spandex. In the future, we will further pay attention to the follow-up of domestic and foreign orders in the downstream. If the supply of spandex is further abundant in the future, if the demand is difficult to boost or even declines, the market price of spandex will There is bound to be greater pressure.
2. Polyester filament can never escape the curse of sales promotion (hotness: ★★★★★)
In recent years, polyester filament has always been unable to escape the curse of promotion, and production and sales have shown a pulse pattern. However, as the frequency of promotions accelerates, the promotion effect is greatly reduced. Taking 2021 as an example, in the early stage, companies concentrated on preferential promotions, and the average daily production and sales were more than 300% – 400%, the frequency of promotions accelerated in the second half of the year, and the average daily production and sales were around 200%. Since November, only a few companies have increased their production and sales on the day of polyester filament promotions, and most companies have produced and sold 100%-200%.
The contradiction between supply and demand of polyester filament has become prominent, which has forced companies to frequently promote shipments this year. However, at present, the rapid rise and fall in raw material prices has indeed had an impact on downstream acceptance. At the same time, power supply restrictions in September have concentrated on stocking up. In fact, part of the peak season demand in the downstream has been overdrawn. Due to the uncertainty of overseas epidemics, it is expected that it will be difficult to improve in the short term. The overall export may be slow in the peak season and not weak in the off-season. In terms of domestic demand, although domestic demand has improved, the current corporate cash flow and corporate debt situation are not optimistic, and the ability of corporate speculative stocking has declined, so actual procurement demand will also lose its explosive power.
3. Textile companies, hold on! Zhejiang issues electricity price increase notice (Popularity: ★★★★)
According to the electricity price reform notices issued by various regions, there are differences in the electricity price increases implemented on December 1, but in most areas, the electricity purchase price is 1.5 times. In some areas, electricity prices for industrial and commercial users are adjusted at different times, and the increase range is also between 5 and 6 cents. This nationwide electricity price reform is due to the requirements of the National Development and Reform Commission, so various places have begun to respond to national policies.
Rising electricity bills have a profound impact on the textile industry! The profit growth rate of the textile industry has slowed down in recent years, and some sub-sectors have even experienced profit shrinkage, especially due to the recent huge cost pressures caused by raw materials, freight, exchange rates and other factors. The rise in electricity prices directly increases the production costs of weaving enterprises, and the production of enterprises is further affected.
4. The mutated virus strain disturbed the market, and oil prices experienced a rare plunge (Hot: ★★★)
At the end of November, polyester manufacturers started joint production cuts, which caused the raw materials to temporarily stop falling and recover! But the good times did not last long. As the super variant of the new coronavirus “Omicron” invaded the world, financial markets suffered heavy losses. Panic selling led to a rare plunge in U.S. stock markets and oil prices, and raw materials suffered another heavy fall.
At the same time, the market’s risk for foreign trade orders has increased sharply! Compared with the Delta strain, the new variant strain of the new coronavirus “Omicron” announced by South Africa this time contains a large number of mutations, some of which are “worrying.” According to reports, this mutated strain may not only cause a greater risk of transmission, but may even have greater vaccine resistance. The WHO said that the mutated strain of “Omicron” increases the risk of reinfection of the virus in humans. Currently, the mutant strain is spreading at an alarming rate in Africa and outside Africa. New York in the United States has entered a “disaster emergency state” and some countries have closed down the country.
5. Xinfengming puts another 300,000-ton production capacity project into operation! Many polyester filament leaders such as Hengyi and Hengli are competing for this big market! (Popularity: ★★)
On November 25, Xinfengming announced that the 600,000-ton functional flexible customized staple fiber project invested and constructed by its wholly-owned subsidiary Huzhou Zhonglei Chemical Fiber Co., Ltd. has reached the conditions for production. The project is constructed in two phases. The first phase of the short fiber project with an annual output of 300,000 tons entered trial operation on November 15, 2021. After a stable trial operation in the early stage, the project has officially entered production.
In the 2020 domestic polyester staple fiber production rankings released by the China Chemical Fiber Industry Association in May this year, Zhejiang Hengyi Group Co., Ltd. ranked first. In recent years, constantYi Petrochemical’s polyester staple fiber production capacity has increased rapidly. As of the end of 2020, its total polyester staple fiber production capacity is 880,000 tons, involving Suqian Yida New Materials Co., Ltd. and Fujian Yijin Chemical Fiber Co., Ltd. (which has formed an annual polyester staple fiber production capacity of 26.6 million tons) etc.
It is understood that companies such as Hengli also have plans to increase polyester staple fiber production capacity. At the same time, the original leading polyester staple fiber companies have also accelerated their expansion. For example, in the fourth quarter of this year, Huaxi Co., Ltd. is expected to have new production capacity put into production.
6. The RMB has risen strongly to its highest level since June, and the pressure on foreign trade companies to settle foreign exchange has increased sharply as the year-end is approaching! (Popularity: ★)
On December 1, the central parity rate of RMB against the US dollar was 6.3693, an increase of 101 points, a new high since June. The exchange rate of RMB against the U.S. dollar rose and fell back that day, once hitting the 6.36 mark during the session, just one step away from the year’s high of 6.3565.
When looking forward to the exchange rate trend in 2022, the Bank of China Research Institute pointed out that under the influence of factors such as the increasing downward pressure on China’s economy, the high probability of slowing down the growth of external demand, and the normalization of the Federal Reserve’s monetary policy, the RMB exchange rate may face certain depreciation pressure. However, China’s economy is still relatively resilient, the government’s policy control tools are sufficient, and the RMB exchange rate will most likely still fluctuate within a reasonable range.
As the RMB continues to appreciate, the risk of foreign trade losses for foreign trade companies continues to increase. As a result, for Chinese foreign trade companies that settle in U.S. dollars, it can be said to be a disaster that never comes singly and adds insult to injury!
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