For today’s textile companies, orders are definitely the primary concern. Orders represent demand, it means that inventory will no longer accumulate, and it means that the company can continue to produce and operate normally. But the fact is…
July has passed, and August is already halfway through. The legendary days of Gold, Nine and Silver Ten are coming soon. The textile market seems to have reached a watershed again. Currently, many Textile bosses are fighting in the market. They seem busy, but their profits are lower. This may be the beginning of another round of reshuffle.
Oil prices continue to fall
The outlook for supply and demand is uncertain. Traders wait and see and cautiously enter the market. International oil prices have fluctuated this week. European and American crude oil futures continued to fall due to concerns that the spread of the Delta variant of the coronavirus would slow down demand recovery, and a significant increase in U.S. oil drilling rigs also dampened market sentiment.
On August 13, the settlement price of September 2021 West Texas Light Oil futures on the New York Mercantile Exchange was US$68.44 per barrel, a decrease of US$0.65 per barrel, or 0.9%, from the previous trading day. ; London October 2021 futures settlement price was US$70.59 per barrel, a decrease of US$0.72/barrel, or 1.0%, from the previous trading day.
Domino polyester industry chain is declining
Fall in international oil prices , driving the entire polyester industry chain downward, once again casting a shadow over the originally profitable polyester filament destocking process. Since August, polyester filament has been promoted many times, with prices reduced by 100-200 yuan/ton. On the 12th, polyester factories lowered prices by another 100-150 yuan/ton. However, the promotions since August ended up with average weekly production and sales at about 50%, and the trading atmosphere was quite sluggish. The “buying increase” failed and the “promotion” also failed. Factory inventory pressure is slowly increasing under the current situation of continued light production and sales. Life for polyester factories is getting more and more difficult!
Affected by the recent poor production and sales of polyester filament, prices continue to drop, and the FDY part of polyester filament The model is on the edge of the cost line. As of August 10, polyester filament POY150D/48F reported 7625, FDY150D/96F reported 7800, DTY150D/48F reported 9275, POY profit 116.46, FDY profit -108.55, DTY profit 450 (yuan/ton). Some weaving companies: Raw materials can be bought and used, and production will be stopped if they are not available
Relative to the price of raw materials, what has a greater impact on the price of gray fabrics is the poor situation of weaving companies receiving orders. The textile industry is subject to strong seasonal influences. To put it simply, it depends on the weather.
A common pattern among weaving companies in previous years is to accumulate inventory during the off-season, and then sell it intensively during the peak season. There is a big gap in the number of orders in the off-peak and peak seasons. But this year, the orders received by weaving companies do not seem to have increased significantly.
The price of raw materials is directly related to the cost of gray fabrics. Every time the price of raw materials fluctuates, weaving companies must think about it. The question of whether to stock up on raw materials is because perhaps one operation of raw materials can bring profit changes ranging from tens of thousands to millions of yuan to the company.
This year, polyester prices have fluctuated sharply. The market has lost its direction for a while, and weaving companies have become less concerned about buying raw materials. For some weaving companies with few orders, the company’s current raw material inventory is sufficient. Those that can start production just need to purchase and use as they go. Those that cannot start production will directly stop production and do not need to use raw materials. The current rise and fall of polyester yarns is of great concern to them. It seems to have no impact anymore.
“The recent orders are obviously not as good as those in the previous period, and the cost of raw materials is also high. If there are no orders, everything we knit will be in stock. The inventory cost is huge, and we may lose money.” A textile The boss said.
It is difficult to describe the market conditions during the Golden Nine and Silver Ten periods
The order decline of some weaving companies is still very obvious. Under such circumstances, weaving companies are naturally not as active in purchasing polyester yarns as before. Enterprises’ enthusiasm for buying silk has decreased, and the price of polyester filament has also begun to fall, falling by about 200 yuan/ton in one week. But on the other hand, it is almost the time of the Golden 9th and Silver 10th. A previous survey showed that nearly 60% of the textile people are optimistic about the market next year, and nearly half of the textile people still have plans to stock up on raw materials.
For textile companies, the biggest problem in stocking raw materials is no other than insufficient funds caused by excessive inventory and difficulty in collecting receivables. But in this year’s global economic downturn, this problem is indeed difficult to avoid.
<br
