I still remember that in early October, the price of polyester filament rose as the cost side rose. On the first day when the polyester factory released the news of the price increase, the production and sales of polyester filament surged. In the following days, downstream companies were in a “buy up” mentality. Under the guidance of the polyester yarn trading atmosphere, the polyester yarn inventory has also dropped significantly. Today, one month later, polyester filament production and sales have been below 50% for nearly a week. Production and sales have continued to be sluggish, and inventory has begun to rise, returning to 20 days of inventory. At present, the overall inventory of the polyester market has been concentrated at 16-26 days, of which POY inventory is around 12-19 days, FDY inventory is around 15-17 days, and DTY inventory is around 17-25 days.
Behind the deserted production and sales is the rapid rise of resistance among downstream weaving manufacturers. The current price increase of gray fabrics for polyester products is around 15%. We see polyester prices again, month-on-month. Before the price increase last month, the price increases of conventional polyester yarns were: 150D FDY increased by 21.9%, 150D POY increased by 25.5%, and 150D DTY increased by 23.6%. The downstream price increases were completely unable to fill the profit difference. , which makes most weaving companies choose the purchasing strategy of on-demand purchasing and wait for the price of polyester yarn to drop.
“Coal super-crazy” encountered strong policy suppression
Exacerbating the price fluctuations of textile raw materials
Recently, coal prices have risen rapidly, hitting record highs. In order to curb the “coal super craze”, reduce the excessively high coal prices to a reasonable level as soon as possible, and return the coal market to rationality, the National Development and Reform Commission has launched a series of “combination punches” that are so powerful that they are rare.
Since October 19, the price of the main contract of thermal coal has dropped significantly. In the past 9 trading days, it has touched the lower limit in 7 trading days, and 5 of them closed at the lower limit. , as of November 1, the main contract price of thermal coal fell from a maximum of 1982.0 yuan/ton to a minimum of 917.6 yuan/ton, a decrease of 53.70%, basically giving up all the gains since September 10.
Significant fluctuations in coal have intensified the price fluctuations of textile commodities. Affected by thermal coal, the prices of upstream chemical fiber raw materials PTA, ethylene glycol, polyester filament and other polyester products began to fall back.
The current weakening of the cost side has caused polyester manufacturers to obtain high profit margins, and this is also a “double-edged sword”. While the profits are high, polyester will Loss of cost support. Recently, polyester factories have started to offer promotional discounts for some products, and the quotations for some specifications of polyester filament have been significantly reduced by 100-500 yuan/ton.
The power restriction policy is on again
Downstream texturing and weaving are preparing for the “New Year”
On the other hand, in recent times, the “wave of power cuts and work stoppages” has swept across the country In more than 10 provinces, although power rationing has occurred during peak power consumption in previous years, the situations of “opening for two and stopping for five”, “limiting production by 90%”, and “thousands of enterprises suspending and limiting production” are unprecedented. At present, the impact of power restrictions still exists. For example, there are rumors that a new round of production restrictions will start in Taicang, Jiangsu Province on November 10, involving textile companies. In addition, the orderly power consumption level in Zhejiang will be adjusted from Level C to Level C starting from October 20. Level B has caused some factories that were “open for three days and closed for four” to be “open for four and closed for three days”, etc. However, the policy adjustment did not stimulate a sharp increase in the number of starts in the short term. There is greater resistance to price increases in new orders. There is no significant increase in terminal textile and apparel orders. Raw material stocks are sufficient and consumption is relatively slow. In previous power cuts, relevant departments would notify them in advance to give companies a buffer. However, this time the power cuts are uncharacteristic and have an impact on the company’s normal production and operation. If there is a long-term power outage, production capacity will definitely not be able to keep up with demand, and orders can only be further reduced, making the supply on the demand side even tighter.
As time goes by, the resistance of weaving manufacturers is heating up rapidly, and most of them are already prepared. Raw materials and raw material prices have weakened, and there is little enthusiasm for purchasing them, and the wait-and-see atmosphere has become more serious.
At the same time, most industry insiders believe that textile and apparel sales are expected to decline. From January to July, the single-month retail sales of clothing, shoes, hats, needles and textiles continued to grow positively year-on-year, but the growth rate converged rapidly from April. From August to September, the year-on-year growth rate turned from positive to negative, falling by 6% and 4.8% respectively. From January to September, cumulative retail sales were 964.14 billion yuan, a year-on-year increase of 20.6%, but lower than the same period in 2019. In terms of exports, from August to September, the monthly export volume of clothing increased year-on-year. However, due to the impact of front-loading overseas orders, the export growth rate in the fourth quarter may slow down.
The sudden “power rationing and production restriction” caught the entire textile industry chain off guard. Phenomenons such as reduced production capacity, rising raw materials, and shortages were reflected from the raw material end to the demand end. . The upward trend in polyester filament yarns in October was mainly driven by cost-side support and tight supply caused by production restrictions. However, as the cost side weakens, downstream weaving companies are showing resistance and are less willing to purchase, and more choose to purchase on demand. Although some manufacturers currently report increased demand for winter orders, some gray fabric factories have relatively limited profits.Even some orders have been missed, and production enthusiasm is unlikely to improve. Therefore, on the whole, negative factors are gradually emerging, and polyester filament prices are expected to fluctuate downward in November. </p
