It is said that May is the traditional off-season for the textile industry. Looking back at the recent market trends, signs of weakness seem to be showing.
From May 1st to 15th, the internal price of PTA plummeted, with the quotation falling from the original 6,150 yuan/ton to 5,475 yuan/ton, a drop of nearly 700 yuan/ton. As the downstream sentiment becomes increasingly strong, polyester yarn manufacturers that were originally “hard-headed” finally couldn’t hold back anymore and started a price reduction promotion mode. As of May 18, the quotations of mainstream polyester varieties have fallen by more than 100 yuan/ton.
This is the case at the upstream raw material end, but what about the performance of downstream textiles, printing and dyeing?
Textile: We are short of orders and stocking up. If it fails, we will take a holiday.
“It is very difficult to receive orders this year. It can be said that there are internal and external worries.” A textile boss said.
The most intuitive manifestation of foreign aggression is the shrinking of foreign trade orders. Data show that in the first quarter, my country’s textile and apparel exports to the United States, the European Union, and Japan decreased by 18.4%, 24.7%, and 8.7% year-on-year respectively. Affected by this, some textile companies that mainly focus on foreign trade have seen significant shrinkage in orders.
A certain weaving company said helplessly that we mainly produce polyester products such as polyester taffeta and pongee. Since old customers are all doing foreign trade orders, once their orders are not in good condition, our orders will also have problems. Entering May, the operating rate has dropped from the original 100% to 75%, and both inventory and orders are being produced. If there are still no new orders after existing orders are delivered, the production will continue to be reduced and production may be suspended for a while.
As for internal worries, the main reason is the price war caused by involution. We all know that at the time of the alternation of “gold, three, silver and four”, polyester yarn quotations have been rising continuously. Under the inertial thinking of “buying up, not buying down”, some companies purchased a batch of high-priced raw materials. But who would have thought that since mid-April, the price of polyester yarn has been falling. The survey results show that the current fabric prices are basically stable, and varieties with high inventory are usually sold at low prices. If products produced with high-priced raw materials fall into low-price competition, it would be reasonable for weaving companies that cannot afford to lose money to consider taking a holiday.
It is reported that some companies have planned holidays due to concerns about the impact of unstable raw material prices on profit margins. (Can’t sell any more! Are these manufacturers actually going on holiday?)
Printing and dyeing: When the computer is fully powered on, order continuity becomes a hidden danger
I still remember that from February to March, whenever I asked about the situation of dyeing factories, words such as “liquidation” and “delay” appeared frequently, and there was even a strange market phenomenon of “asking about the market conditions was average, but looking at the dyeing factories, the stocks were liquidated.”
In 2023, printing and dyeing enterprises finally ushered in the long-lost “spring”. Data show that in the first quarter, the output of printed and dyed fabrics by enterprises above designated size in the printing and dyeing industry was 12.491 billion meters, a year-on-year decrease of 0.27%. From the perspective of monthly output, in March, the output of printed and dyed fabrics by printing and dyeing enterprises above designated size was 5.826 billion meters, a year-on-year increase of 11.37%.
However, the opposite trend will eventually return to normal. Entering April, the hot printing and dyeing market gradually stalled, and the operating rates of some dyeing factories declined. A salesperson from a dyeing factory said that currently, all production lines are still operating at full capacity. However, the shortage of foreign trade orders has obviously also affected the printing and dyeing industry, and market orders have become the protagonist of dyeing factory orders. Comparing the warehousing data, the total warehousing volume from February 1st to 15th was close to 12 million meters, but the total warehousing volume from May 1st to 15th was only over 6 million meters. The warehousing data was directly cut in half!
The amount of incoming warehouses is the most intuitive reflection of the hot and cold market conditions in the printing and dyeing industry. Judging from the current situation, the state of full operation of dyeing plants may only be temporary. After the market slowly weakens, insufficient continuity of orders may become a hidden danger. Those printing and dyeing enterprises whose situation is not ideal are likely to fall into “crisis” again.
Relevant people boldly predict that as the market order enters the final stage, the operating rate of dyeing factories may experience a significant decline in June.
Postscript
There are always two sides to a coin, and so is today’s textile market. Lack of orders is real, and similarly, there are textile companies that maintain good orders. At a time when polarization is becoming more and more intense, differentiated development may be the only way to go.
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