Demand turns to off-season in November, and the textile industry is about to start the “cold winter” mode
According to the fabric index, after nine consecutive months of good growth, the domestic fabric market continued to show an upward trend in October. As of the 31st, the fabric index was 849 points, a new high for the year, an increase of 3.28% from 822 points at the beginning of the month, and a year-on-year increase of 14.27 points. %. It is 20.95% lower than the cycle high of 1074 points (2013-02-19) and 18.74% higher than the low of 715 points on February 17, 2016. (Note: The period refers to 2011-12-01 to the present)
Inventory hits low level during the year. The polyester industry chain leads the fabric list
According to price monitoring, the polyester industry chain led the entire fabric list in October. Among the 13 fabric products that increased month-on-month, the top three products were polyester POY (6.77%), polyester DTY (5.13%), and polyester staple fiber (4.91%). First of all, it mainly benefits from the fact that the inventories of mainstream manufacturers are generally at a low level, hitting a low level during the year. According to statistics, as of now, POY inventory has dropped to around 3-7 days, FDY inventory has dropped to around 5-8 days, and DTY inventory has reached 10-15 days. Some product specifications have even experienced tight supply. At the same time, major mainstream manufacturers held several market seminars in October, at which they were still optimistic about the mid- to long-term polyester filament market. Secondly, boosted by OPEC’s first agreement to limit production, crude oil prices have always been at a high level, breaking through the $50 per barrel mark. The overall operating load of the PTA device is only maintained at about 62%, coupled with the speculation of funds in the futures market, the cost side forms a certain support. After other National Day holidays, the fabric market is ushering in the peak demand season of the “Silver Tenth Day”. Terminal weaving has performed well recently, coupled with the impact of Christmas order demand in Europe and the United States, prompting an increase in foreign trade orders this month. Among them, the comprehensive operating rate of looms in Jiangsu and Zhejiang has climbed to a high level during the year. According to statistics, the comprehensive operating rate of looms in Jiangsu and Zhejiang is close to 85%, an increase of 3.5 percentage points from the end of September.
Crude oil is currently in a volatile situation. The PTA unit restart operating rate will return to around 70%, the supply side will gradually increase, and cost support will weaken. At the same time, the downstream fabric industry will also enter the off-season of demand, gradually highlighting its weakness. In the absence of further good news to stimulate the polyester market, it is estimated that there is a risk of falling back in November.
Lack of market confidence and weak cotton price rise
Compared with the “big falls and big rises” in August and September, October continued to rise, but the cotton market price entered a period of shock adjustment in the middle of the year. As of the end of October, the average market price of cotton (3128B) was 15,354.71 yuan/ton, an increase of only 3.29% from the beginning of the month and a year-on-year increase of 18.33%. Main reasons: 1. The price of seed cotton fluctuates greatly. In the early stage, the price of seed cotton rose rapidly. In Shandong, Hebei and other places in the Yellow River Basin, seed cotton is generally 3.60-3.70 yuan/jin, and some individuals reach 3.90 yuan/jin. Many ginners are trying to After closing the test roll, I had no choice but to stop closing and wait and see. Later, as cotton was concentrated on the market, ginners in particular were under greater pressure to destock, and manipulating the purchase volume has become a major trend. Therefore, the price of seed cotton has continued to fall. 2. In terms of downstream cotton yarn, driven by costs, cotton yarn prices continued to rise slightly. As of October 31, the average market price of pure cotton yarn for 21S high-end knitted fabrics was 22,525 yuan/ton, up from the beginning of the month. 1.52%. Most weaving factories have reported poor market conditions. Although prices have not changed much, orders and sales have shrunk.
In the short term, the amount of new cotton on the market will gradually increase. According to the national cotton market monitoring, as of October 28, the national new cotton picking progress was 73.6%. At the same time, downstream fabric companies still have some low-price cotton reserves and are not in a hurry to replenish their stocks, and the order-taking situation is not ideal. Originally, the “Golden Nine and Silver Ten” were the peak seasons for corporate production, but the actual situation is indeed “the peak season is not prosperous.” According to a survey of 30 household cotton companies, more than 60% of them are still bearish on the market outlook, and market confidence is still insufficient. With numerous negative signals currently being released, it is estimated that cotton prices will continue to rise weakly in the short term.
Retail sales of work clothes, shoes and hats increased year-on-year in September, and fabric exports dropped sharply
From the perspective of the fabric industry, fabric exports dropped sharply in September. According to statistics from the General Administration of Customs, my country’s fabric workwear exports in September were US$22.76 billion, a year-on-year decrease of 15.4%; Fabric products from January to September Cumulative exports of workwear totaled US$201.1 billion, a year-on-year decrease of 4.9%. However, in the retail sales of goods, the retail sales of work clothes, shoes, hats, and knitted fabrics in September were 117 billion yuan, a year-on-year increase of 6.7%. From January to September, the retail sales were 1.002 billion yuan, a year-on-year increase of 7.2%. The other bulk commodity supply and demand index (BCI) in October was 0.57, with an average increase of 3.83%, reflecting that the manufacturing economy was expanding in that month compared with the previous month, and the economy was on an upward trend.
Fabric industry analyst Xia Ting believes that the continued strength of the fabric market in October was mainly due to the good performance of various products in the polyester industry chain and the strong promotion of the small variety cocoon silk market. However, there is a higher possibility of a market correction in November.
Specifically speaking, the cotton textile market supply situation at home and abroad this year has improved compared with the previous year. The overall situation of domestic cotton production reduction has been determined. According to the forecast of the China Cotton Association, the national cotton total in 2016/17 The output is about 4.641 million tons,It decreased by 3.7% year-on-year, the fourth consecutive year of decrease. And the import volume is also decreasing. From January to September 2016, my country imported a total of 654,900 tons of cotton, a year-on-year decrease of 504,500 tons, a decrease of 43.51%. However, downstream consumption power is insufficient. As new cotton is launched on a large scale, cotton sales pressure is gradually increasing, and the pressure for prices to continue to rise will also increase. In the chemical fiber market, in terms of equipment, after November, unless there is force majeure or a breakdown, the factory will not choose to perform maintenance in winter, which means that it will maintain high load operation before the end of the year. At the same time, the prospect of crude oil production restrictions is unclear and presents a volatile pattern, so cost-side support is limited. In the cocoon silk market, autumn cocoon harvesting and drying are coming to an end. Generally speaking, the cost of cocoon raw materials for the whole year has been basically determined. Before the demand has substantially improved, the unilateral support of raw material costs is obviously not enough for the current cocoon silk market to continue to rise, but it will have a positive impact on the market. The stability of the market has certainly given a boost, and it is generally estimated that the price of cocoon silk will decline slightly in November.
At the same time, from the perspective of the entire fabric industry, the fabric export situation is still severe. In November, the fabric industry will also enter the off-season of demand. Affected by the shrinking demand, the overall situation will start a “cold winter” mode. The index is estimated to be 850 points high and 830 points low.
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