Since March, trading in the textile market has turned sluggish, and most products have no longer enjoyed the post-holiday gains. But whether it is the cotton industry chain or the polyester industry chain, the game between upstream and downstream has begun to become more and more obvious.
Take rayon yarn as an example. Since March, the phenomenon of low-price resale of rayon yarn has increased. This situation has fallen since January, while viscose staple fiber has After the price reached a high level, there was no adjustment, allowing competing products and downstream products to fall wantonly, and there was a sense of being determined not to relax. However, the continued strong price has not brought sufficient production and sales rates to raw material manufacturers.
1. Upstream strength: industry inventory pressure has not yet formed
In December 2020, due to the same early overdraft of rayon yarn orders and insufficient follow-up of follow-up orders, the price expectations for viscose staple fiber were bearish. Most industries predict that viscose will be sold in late December. It is expected that the price will reach 10,000 yuan/ton. The expectation drove the center of gravity of viscose staple fiber to decline in early December. At that time, the inventory of the viscose staple fiber industry in December only showed a small rebound, which was far from enough to cause pressure on the factory. . At the end of March 2021, although the physical inventory of viscose staple fiber factories continued to grow, it did not increase the pressure on inventory accumulation. Even if the industry’s expectations for April-May are not good, viscose staple fiber may still absorb 12 With monthly market experience, there is no intention to avoid risks in advance and reduce one’s selling price without obvious pressure.
2. Downstream indifference: low-priced raw materials have not yet been digested
During the continuous rise of viscose staple fiber, most spinning companies have fully stocked up. The current orders of viscose staple fiber can still maintain the majority of producers around mid-May. The price of viscose staple fiber at this time cannot drive itself. On the other hand, if transactions improve, it may lead to the devaluation of raw material orders, finished product inventory and other goods held by the backend, and the price of the entire industry chain will plummet. Secondly, judging from the low levels of the rise and fall of rayon yarn, the increase at the high end of the range is basically in sync with that of viscose, but there is a clear differentiation at the low end. The main reason is that the unclear market expectations and the different costs held by yarn companies have caused confusion in the market at low prices. However, this phenomenon may converge with the reduction of traders’ inventories and the gradual digestion of low-priced viscose staple fiber by spinning enterprises.
Weaving forms a “barrier lake”
Exchanging quantity for profit is whether the entire industry can return The key to “being on the right track”
An 80,000-spindle yarn factory in Jiangsu said that compared with the continued decline in cotton yarn prices in the light textile markets in Jiangsu, Zhejiang, Guangdong and other places, the price adjustment by the yarn mill was an afterthought. However, each price adjustment has a greater impact on upstream cotton, downstream gray fabrics, fabrics and clothing companies.
On the one hand, orders for cotton yarn and gray fabrics were not ideal in March, mainly because domestic sales and foreign trade overdrafted demand in January and February; on the other hand, cotton prices plunged sharply in late February. This has led to a strong wait-and-see atmosphere in the industrial chain.
As of the end of March, cotton spinning mills, fabric and clothing factories are still in a state of continuous inventory accumulation:
First, from the perspective of time and market Judging from the feedback, it is expected that some of the orders that have been postponed since mid-February will be received in mid-to-late April. Spinners and cloth mills are confident that they are not missing, but they just need to trade time for space;
Second, raw materials must give up part of their profits to downstream terminals and straighten out the industrial chain, so that production and sales will gradually become balanced.
From the survey, the main contradiction in the current market is the game between raw materials and gray cloth and fabrics. The surge in raw materials around the Spring Festival and the substantial improvement in profits of raw material factories have led to the decline of weaving factories and fabrics. It is difficult for enterprises to digest it, forming a “barrier lake”. Therefore, how enterprises exchange volume for profits is the key to whether the entire industry can return to the “right track”. </p
