Recently, stimulated by the increase in the price of upstream raw materials, especially the surge in crude oil futures, the polyester filament market has rebounded significantly, and the price of market transactions has been rapidly pushed up. The prices of most polyester filament products have reached 50-50 for many consecutive days. RMB 100/ton increase. This is good news for the market that has been declining for a long time in recent days. Some people believe that the strength of crude oil will drive the price of polyester yarn to continue to rise sharply. However, judging from the recent market reactions, it seems that There is not a strong sentiment to chase the increase. More market participants believe that this is just a short-term replenishment and a market driven by polyester factories passing on losses. Its rise is not consistent with the current terminal market fundamentals.
Many manufacturers have had their orders canceled by customers
Orders remain weak in the first quarter of next year
Affected by the rebound of the epidemic and related epidemic prevention measures, China’s manufacturing production and demand weakened in September, and industry prosperity continued to decline within the contraction range. The Caixin China Manufacturing Purchasing Managers Index (PMI) released on September 30 recorded 48.1 in September, down 1.4 percentage points from August and the same as May, both the lowest in five months. This trend is not consistent with the Manufacturing PMI of the Bureau of Statistics. The September manufacturing PMI released by the National Bureau of Statistics on the same day recorded 50.1, an increase of 0.7 percentage points, and was in the expansion range for the first time since the second half of 2022.
From January to August this year, China’s import and export scale reached 27.3 trillion yuan, a year-on-year increase of 10.1%, once again demonstrating strong resilience and vitality. But looking at August alone, the growth rate was 8.6%, a decrease of 7.9 percentage points compared with July.
Some businesses reported reduced orders. For example, Zhou Falai, chairman of Zhejiang Huzhou Youtao Clothing Co., Ltd., told reporters that orders after June this year dropped by nearly half compared with last year, and annual sales are expected to be “at least 30% lower.”
Chairman of the Hong Kong Manufacturers Association, Shi Lide, said that factors such as external interest rate hikes, the ongoing conflict between Russia and Ukraine, and soaring energy prices have continued to reduce demand. He pointed out that many manufacturers have currently had their orders canceled by customers. He believes that the export prospects in the second half of this year are not optimistic, and orders will remain weak in the first quarter of next year. He hopes that the government will hold more exhibitions in the future to support Hong Kong’s gradual return to normal, so that Hong Kong businessmen can have more contact with overseas customers. , supporting the rebound of Hong Kong’s exports.
Filament Weaving Association survey:
Five major problems plaguing the production and operation of textile enterprises
In addition, judging from the recent survey results of the Filament Weaving Association, due to the influence of uncertain and unstable factors such as international political conflicts and the spread of multiple domestic COVID-19 epidemics, the domestic and foreign sales markets of the textile industry have been greatly impacted, and the industry development environment is complex and severe. The common difficulties in enterprise production and operation are manifested in the following aspects:
1. Raw material prices fluctuate
Affected by the conflict between Russia and Ukraine, the price of crude oil has fluctuated significantly, causing the price of chemical fiber raw materials to fluctuate. Therefore, when companies receive orders, they cannot determine the price of fabrics, and profit margins are difficult to grasp. They may encounter the problem of substantial depreciation of inventory. Raw materials are cautiously stocked, and some orders are only Delivery may be delayed or canceled, and the company’s production planning is poor.
2. Market demand is weak
From the perspective of the domestic sales market, under the background of epidemic control measures, weakening consumer confidence, and restricted consumption scenarios, low- and middle-income consumer groups have reduced non-essential expenditures, and the performance of apparel products has been sluggish. Under the static management of the epidemic, the home decoration industry is restricted, and the demand for home textile products such as wall coverings, curtains, and bedding is insufficient.
From the perspective of the export market, geopolitical tensions, inflation in Europe and the United States have exploded, and textile imports have tightened. Many companies have reported that current orders have shrunk compared with the same period last year, and there is a large gap compared with 2019.
3. Transportation and logistics are hindered
Under the influence of the epidemic, logistics has been restricted and costs have risen. On the one hand, it has hindered the transportation of upstream raw materials, on the other hand, it has affected product delivery, posing risks to corporate production and operations.
4. Competition among homogeneous products is fierce
During the survey, we learned that due to the decline in market demand, ordinary low-end products are facing unprecedented fierce competition. They can only rely on low prices to sell inventory and maintain production. It is difficult to make breakthroughs in business and sales. When the market is not good, they rely on large-scale batch production. Production companies are often prone to operating difficulties, which exposes the company’s lack of core competitiveness.
5. Employment issues
Enterprises are facing labor problems. On the one hand, due to insufficient orders, the operating rate has dropped, and the enterprise has a certain risk of employee turnover. On the other hand, although recruitment this year has not encountered the difficulties of previous years, the average age of front-line workers is older, and there is a shortage of young workers. More and more companies are beginning to suffer from a shortage of professional talents.
Short-term raw materials usher in a rise
The gray fabric is difficult to conduct: the benefit compression is significant
Judging from the current post-holiday market recovery, as crude oil prices continue to rise, many polyester manufacturers are beginning to raise their sentiments. It is expected that the short-term polyester production and sales atmosphere will improve due to the sentiment of buying up and not buying down; Jiangsu dyeing industry Factories and trading companies gradually increased their quotations and orders after the 5th, but it has not affected the price of gray fabrics so far. However, as the raw material market improves, manufacturers said they will not rule out price adjustments in the future.
However, from the perspective of terminal demand, although some orders for mid-to-high-end fabrics are acceptable, the total market transaction volume is difficult to change; the current situation of oversupply in the market is still prominent, and on the regular sideThe high inventory situation of materials is also serious. Judging from the past two days, the prices of upstream raw materials have increased, the production and sales of polyester products have begun to return to balance, and the comprehensive gray fabric benefits of weaving enterprises have been significantly reduced. The current low-price sales situation is still difficult to change, especially for conventional fabrics such as polyester taffeta and polyester polyester. The sales of products such as textiles, which occupy a large market share, are even more difficult, which has led to the continuous increase in the inventories of weaving companies.
The editor has always believed that only a joint increase in upstream and downstream prices is the best manifestation of the recovery of the industry’s prosperity. At present, the upstream raw material market is rising “heartbreakingly”, the mid-end gray fabric market is still waiting to “rise”, and the finished product market is cautiously waiting and watching. , it will take time for prices to be transmitted smoothly upstream and downstream in the market.
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