Last Sunday, polyester production and sales reached 100% again, and this Monday, the average production and sales reached 160%. The price of polyester filament also increased slightly by 50-100 yuan/ton.
In terms of PTA, PTA futures rose across the board on Monday. The main 1909 contract of PTA futures closed at 5318 points, an increase of 94 points or 1.8% from the previous trading day.
In the past two months, there have been many “a few days’ tours” in polyester production and sales. Both production and sales increased rapidly in a short period of time, followed by polyester growth. Raw materials such as silk and PTA increased. However, most of these short-term “markets” did not last long, because without the support of terminal weaving enterprises, polyester production and sales quickly fell back, and the price of polyester filament also returned to dullness after a brief rise. It was quite “big thunder but little rain”. “the taste of.
Why did production and sales explode briefly?
Affected by high inventories, weaving companies are under great financial pressure, because under the current circumstances, cash is required to purchase raw materials, and the overall price of raw materials is in a decline Therefore, most of the weaving companies currently buy raw materials for immediate use and do not stock up on goods.
But once there is a wave of market conditions and there is a trend of price increases in the market, weaving companies will generally buy a little more than usual. Although they don’t know how long the raw materials can rise, but If it goes up, buying early will definitely be cheaper than buying later. It’s so difficult now, so I’ll definitely save as much as I can. In this way, the phenomenon of brief bursts of production and sales followed by continuous lulls can be explained.
Why is the weaving inventory so high?
The author has been thinking about a question. For the textile market, June, July and August are the traditional off-season. This year’s off-season came earlier, 20 days earlier than usual. , so at this time, weaving companies have accumulated about 20 days more inventory than the same period last year.
Then the question is, will the current inventory be higher than in July and August? Why weren’t weaving companies under as much pressure as they are now?
Here we have to talk about expectations.
The surge in production capacity of peripheral looms is a phenomenon that everyone is aware of, which means that conventional products will be in a situation of oversupply for a long time to come.
Now that China’s weaving industry is almost a perfectly competitive market, the impact of market rules has become very obvious. Once supply exceeds demand, prices will not rise.
If the current textile market is compared to a stock, then this stock gives people a very bad impression. Its performance in the market may have fallen to the limit, but it is really Is it so miserable? In fact, at this point in time, most weaving companies can still sustain it, and those companies that cannot sustain the “summer vacation” are just a few examples. But the off-season has just begun, and how to get through the next two months is the top priority.
Why are traders not stocking up?
When the off-season came in previous years, traders would stock up on gray fabrics for regular products in the market, because they knew that once the market moved from the off-season to the peak season, the price of gray fabrics would generally increase. A slight increase.
In the off-season of previous years, orders placed by traders often accounted for the majority of weaving orders.
But the situation is different this year. Under the double pressure of raw materials and market conditions, the price of gray fabrics can be said to be one price a day. A 300t pongee was only 2.9 yuan before. / meter, but the current price has dropped to 1.9 yuan / meter. It can be said that it is selling at a loss or even at a loss.
As long as the oversupply situation in the market is not resolved, the inventory of gray fabrics by weaving companies will continue to rise, and the market’s estimate of gray fabric prices will always be downward.
In this case, traders who placed orders for weaving companies in the off-season, of course, chose to wait and see, and no longer had the will to stock up. This also explains for some reason why many Weaving companies complain that there are no orders now.
Of course, according to economic theory, the price of a product is not only related to supply and demand, but also to value. Another important factor affecting the price of gray cloth is cost, in other words, the price of raw materials.
Not all the rising prices of raw materials bring disadvantages
When raw materials have been rising, ��Many times cloth prices fail to rise, and it seems like they are losing money, but cloth owners still make money because the cloth in stock previously was made of cheap raw materials. Although it seems that the cloth boss is under a lot of pressure, it means that the value of their inventory of cloth is increasing day by day.
But when the price of raw materials falls, the situation is reversed. Especially now that there is so much inventory, every time the raw materials drop a little, it means that the price of all the cloth in the inventory is falling. If there are 2 million meters of cloth in stock and the price drops from 3 yuan/meter to 2.5/meter, the value of the cloth in stock drops from 6 million yuan to 5 million, which is equivalent to a loss of 1 million yuan to a certain extent.
Can cloth prices really go up?
First of all, whether raw material prices can rise is a question worth thinking about.
Previously, PX began to rise rarely, which led to a wave of polyester market. However, terminal weaving showed some “indigestion” to this wave of market. The cloth boss was under great financial pressure and was very worried. It is difficult to withstand the rising prices of raw materials. Moreover, it is only in June. According to the experience of previous years, this off-season will last until at least August. It is not a good time to increase the price of raw materials now.
What’s more, if raw materials go up, will the price of cloth go up? There are a lot of sell-offs in the market now, and many companies are selling cloth to maintain capital or even lose money in order to clear inventory. Even if the price of raw materials can rise in the future, if the oversupply situation is not resolved, many weaving companies will sell goods at the current price in order to clear their inventory. After all, the market size is there, and in this way they still have gains. It’s profitable, but in the end, the price of cloth still won’t go up.
In the long term, the newly added peripheral loom production capacity will not be fully digested, and supply will exceed demand. If it is not reversed, the sluggish market environment will not be reversed.
In the short term, to “relieve pressure” on weaving companies, the first step is to regain market confidence and stabilize cloth prices. Even if they do not rise in a short period of time, there must be A rising expectation can allow downstream traders and fabric companies to jointly share the inventory pressure of some gray fabrics, and the market will have an opportunity to prosper again. </p
