In early September, someone once described the textile market like this: “Foreign trade is busy participating in exhibitions, and domestic sales are busy rushing to catch up with goods.” It can be seen that although the foreign trade market has not yet started at that time, domestic sales orders were quite hot, and there was a wave of “catch up with work.” “! Subsequently, the start-up of weaving enterprises has steadily rebounded, and the amount of warehouse purchases by printing and dyeing enterprises has also continued to increase.
But not long ago, a textile person revealed to the editor that in mid-September, the textile market has a trend of declining, and the “Golden Nine” may be of insufficient quality.
Cost pressure is difficult to sustain, and raw materials are likely to fall back
Some time ago, boosted by the sharp rise in crude oil and the positive expectations of superimposed production restrictions, the entire polyester industry chain seemed to have been pumped with blood, and the quotations of various varieties continued to rise, as if the peak season was coming.
However, from the perspective of production and sales data, although the continued upward trend of polyester filament has not changed, the emergence of high-priced raw materials has increased downstream resistance, leading to the reappearance of “one-day trips” in production and sales. This also seems to indicate that “buying will not rise.” The market logic of “buy or sell” no longer works.
Market research shows that since September, the order performance of textile companies has indeed improved compared to the previous period, especially market orders. Varieties such as four-way elastic, pongee, and taslan have all seen partial sales.
Logically speaking, under the premise that the order situation is optimistic, it is natural for weaving companies to purchase raw materials for production. But the fact is exactly the opposite. Faced with the rising prices of raw materials, weaving companies have become more cautious in purchasing raw materials. Purchasing on demand and buying and using as you go has gradually become the mainstream. Some companies even said, “If the raw materials continue to rise, there may be direct decreases.” We really can’t afford to lose money on production!”
Therefore, in the absence of strong support from the demand side, the good times brought about by cost coercion are difficult to sustain. No, after the fundamental support weakened, PTA prices were the first to bear the brunt and dropped within a narrow range. Not long after, polyester filament and other varieties also had a correction.
There is too much pressure to destock, and it may be difficult to realize fabric price increases.
Above we talked about the relevant situation on the upstream raw material side, let’s take a look at some changes in the fabric market.
As usual, in anticipation of the peak season, once there is a “big market” in raw materials, it is a natural thing for fabrics to follow suit. But from the current point of view, the reality is a bit cruel, and the price increases are only for a very small number of varieties.
A textile company said with emotion that fabric prices have become “calm” since I don’t know when. It is extremely rare for large-scale price increases to occur, and the increases are basically for hot-selling varieties. For example, the sales volume of elastic fabrics has been good recently. T400 was quoted at 3.4 yuan/meter before, but rose to 3.7 yuan/meter a week later.
It is speculated that the continued rise in fabric prices is closely related to inventory. It is true that the gray fabric inventory monitoring data of the weaving companies in the sample is constantly declining, but part of the inventory has been transferred to spot companies. Moreover, as early as the off-season, many spot companies took advantage of low prices to stock up on large quantities of fabrics.
In the context of “strong expectations, weak reality”, those companies that hoard large amounts of fabrics have to start the destocking process in order to quickly withdraw funds and alleviate cash flow pressure as much as possible. At this time, the same fabric, prepared with low-priced raw materials or woven with high-priced raw materials, who is easier to complete the order?
In this way, if the low-priced fabrics have not been sold out, how can the price increase come? Relevant people even said frankly that if it cannot be sold, any price increase is meaningless.
Taken together, the textile market’s quality expectations for the traditional peak season have deteriorated, but some textile companies still have hope for the “Silver Ten”. After all, with the arrival of the e-commerce carnival season at the end of the year, major brands will stock up sooner or later. If a big market explosion is difficult to achieve, then a small explosion is quite good.
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