Since this week, international oil prices have bottomed out and rebounded slightly. At the same time, with the support of upstream PX maintenance, PTA prices rose sharply. Under this influence, polyester filament has experienced three consecutive rises.
The previous wave of rising prices of raw materials and fabrics has not yet subsided, but oil prices have risen again. Downstream raw materials are already rising, so will fabrics continue to rise?
Costs for weaving companies continue to increase
For downstream textile traders, the price increase of raw materials and fabrics after the new year will be too harmful. After all, the quotations from customers before the year are still in front of them, but the prices will be adjusted significantly after the new year. It is natural that customers cannot accept it. Of course, it is not only downstream customers who cannot accept this. In fact, the weaving companies themselves are also miserable.
First of all, the cost has risen sharply. After the Spring Festival every year, polyester filament will inevitably experience multiple consecutive increases, with alarming increases. This is an eternal law. Most weaving companies are unwilling to stock up on low-priced raw materials even in the face of the new year. Therefore, they can only use high-priced raw materials after the new year, which also leads to rising fabric costs. And the rising trend of raw materials continues, and the cost of fabrics will become higher and higher.
Recently, the price of polyester filament has continued to rise, and the cost of gray fabric has been affected again. Some weaving factories have raised the price of gray fabric. According to a fabric trader, the price of gray fabrics has recently increased by 0.2-0.3 yuan/meter, but the fabric price has not moved. This increase has completely reduced our profits.
Poor demand, gray fabrics sold off
After the new year, the entire market is looking for low-priced gray fabrics from last year’s inventory, but this type of gray fabric will one day be exhausted. High-priced gray fabrics will always enter the market, but for textile companies that have become accustomed to low-priced fabrics, it is difficult to accept the current high-priced fabrics.
For weaving enterprises, if the price of raw materials continues to rise in the future, the gray fabrics produced from high-priced raw materials will also become relatively low-priced fabrics. However, if the rise ends and raw material prices fall, such fabrics will be stuck at high prices. Especially now that the downstream end of the textile market has not improved substantially, it is difficult to sustain price increases based solely on cost-driven growth. How to quickly move the gray fabric in hand has become a major concern for many weaving companies, so the extremely common sell-off in the market last year reappeared.
Although it is the traditional peak season of March, the weaving market has already seen a large-scale selling phenomenon. “Price war” is everywhere, and the prices of gray fabrics of many specifications are once again approaching freezing point. The price is low and it is the peak season, which promotes the enthusiasm of traders to stock up. An owner of a weaving company revealed: “The current sales situation of gray fabrics is good, but in terms of profit, it is actually very poor. Many gray fabrics do not make money despite being large in volume. They are just a quantity. If the price If it doesn’t drop, no one will buy it.”
Cloth bosses sell goods and traders stock up. The circulation of gray cloth is not great. To put it bluntly, if the price of gray fabrics does not drop and traders will not stock up on goods, then the entire market situation will turn sluggish.
Summarize
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Although lowering prices and selling goods can enhance the current market liquidity, how long can this false demand support the market?
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