After the lively Spring Festival, the polyester raw material market has become turbulent again, and the good start predicted by the author before the holiday has arrived on time. Most polyester factories resume sales on the seventh day of the seventh lunar month – the eighth day of the lunar month, and product prices also increase by 50-100 yuan/ tons. On February6, the 4+2 meeting and PTA futures were held at POY Driven by the rise, the market’s nerves for price increases have once again been triggered. Polyester factories have limited sales and closed prices. Most factories have 100-200 yuan/ tons. On that day, the production and sales of polyester factories also reached about 200%.
However, the author believes that this round of “good start” market is about to come to an end, and weaving factories need to be cautious in stocking up!
First of all, we see that the latest statistics on my country’s foreign trade import and export released by the General Administration of Customs show that my country’s total exports of textiles and clothing in 2016 were 262.45 billion, year-on-year. Down 7.5%. Among them, textile exports were 104.99 billion, down 4.1%; clothing exports were 157.46 billion, down 9.6%, External demand is clearly in decline. In 2017, with the new US President Trump taking office, his advocated new policy – the reshoring of manufacturing, makes us look forward to the new year. It is difficult to be optimistic about the trend of international trade, and the United States is the main market for my country’s textile and apparel exports. This will inevitably further deepen the decline of our textile and apparel exports. Therefore, the author’s preference for foreign demand in 17 will continue decline.
Secondly, we have seen that the price of polyester raw materials has been at a historical high due to the continuous rise in the market before the holiday. Its inventory has also returned to normal levels due to the stagnation of holiday sales, which also makes him less confident to raise prices willfully. Moreover, the current profits of polyester raw materials are relatively good, and factory operations remain at a high level, so inventory accumulation is relatively fast.
In addition, let’s look at the downstream weaving factories. The current downstream weaving market is still in the resumption stage. Many factory workers have not yet arrived, making it difficult to operate normally. The startup will only be 6-7 between. The author has also seen many companies using various methods to recruit workers. Many bosses said that the labor problem this year may be more serious than in previous years, mainly due to the lack of front-line operators. In addition, the market has just opened, market orders have not yet started, and the production direction of the weaving factory is not yet clear. Therefore, it is estimated that the return to normal production in the downstream may be delayed this year compared to previous years. Coupled with last year’s rising market price of polyester raw materials, it is a continuous rising process. As the downstream weaving factories continue to chase the increase, they transfer the inventory of polyester factories to themselves. Coupled with the traditional stocking before the Spring Festival, Downstream weaving factories have accumulated higher raw material inventories. So the current downstream consumption and demand for raw materials will not be large, so the inventory of polyester raw material factories will accumulate.
Based on the above, at present, with no obvious signs of improvement in domestic and foreign demand, the procurement of raw materials by downstream weaving will decline, and the accumulation of inventory in polyester factories will be obvious. Under inventory pressure, polyester factories in the early stage will Alliance behavior will collapse and prices may fall back. Therefore, the author believes that the current hoarding of raw materials by weaving factories should be done in an appropriate amount, and there is a greater risk in continuing to chase the rise.