The Spring Festival holiday is approaching, and many textile factories are already on vacation. However, this does not mean that the entire textile market has entered a “vacuum period.” There are still some raw material manufacturers who are still raising voices from time to time.
Recently another mainstream company has issued a closure announcement:
It can be seen from the announcement that due to the increase in PBT raw materials, especially the tight price of BDO, the cost of PBT has changed dramatically. Due to the imbalance between supply and demand, the company decided to close the PBT product.
PBT fiber
It is reported that PBT fiber is a fiber made from PTA and BDO. , a new type of polyester fiber. PBT fiber has the characteristics of high elasticity, soft texture, easy dyeing, good drape without wrinkles, and high fastness to washing.
Since the hot market in 2016, the demand has been relatively stable, especially suitable for making swimsuits, hosiery, training clothes, gymnastics clothes, bodybuilding clothes, tennis clothes, and dance tights Highly elastic textiles such as clothing, stretch jeans, ski pants, stockings, and bandages for medical applications.
Petrochemical giant DuPont also previously announced that starting from January 1, 2021, the price of PBT products will increase by US$0.2/kg. The market has been in a state of tight supply, coupled with the price of raw materials The price has been rising frequently, so the manufacturer has also issued a notice to close the market and hesitate to sell.
Compared with previous years, although the market will still see a “rising tide lifts all boats” phenomenon on the eve of the Spring Festival , but it has risen even more fiercely this year. Boosted by vaccines, international oil prices have stopped falling and rebounded. Catalyzed by the epidemic, logistics and freight costs continue to hit new highs. This has paved the way for some products that have reached a balance between supply and demand. A few raw material manufacturers said: “It won’t work if it doesn’t increase”!
Recently, viscose staple fiber has also shown this trend. As one of the bulk textile raw materials with eye-catching performance in 2020, viscose staple fiber has also been showing an upward trend after New Year’s Day.
“Originally in mid-January, the raw material factory told me that the price would rise to 13,000 this year. Who knew it would rise to 13,500 a few days later? I couldn’t bear the price increase. , but I can only buy it because I am afraid that the price will rise again later.” A person in charge of a cotton mill said helplessly.
It is reported that since New Year’s Day, the viscose staple fiber industry has experienced another surge. Downstream yarn mills have made frequent purchases, and mainstream viscose staple fiber manufacturers have adjusted their quotations from time to time, from 11,300 at the beginning of the month. Yuan/ton has risen to 13,300 yuan/ton, with a monthly increase of 2,000 yuan/ton. Industry inventories have also fallen from high levels. Currently, industry inventories only last 6-7 days, which is at a low level in several years.
Under this boost, the price of rayon yarn also followed closely, with a monthly increase of 2,100 yuan/ton. At present, the inventory pressure of the yarn mills is not great, and there is basically no pressure on the market after the Spring Festival.
For textile companies, rising raw material prices are undoubtedly a “double-edged sword”:
On the one hand, raw materials continue to rise , which invisibly also helps the company’s own inventory to increase in value. Since the outbreak of the COVID-19 epidemic last year, the textile market has been faced with a situation where there is no order or shortage of orders. Many conventional products have not performed well, which has also led to a significant increase in inventory.
Since October, the weaving market has ushered in the long-lost spring. Driven by the peak domestic and foreign demand seasons such as the e-commerce season and the Christmas season, the demand for raw materials has improved and the market has sold out. Frequently, the inventory of weaving mills dropped significantly, which also gave enterprises a chance to “breathe”, and the inventory of gray fabrics fell for a time.
After New Year’s Day, under the dual stimulation of the recurrence of the epidemic and the Spring Festival effect, the market has once again entered the replenishment season, whether it is light and thin fabrics in spring and summer or medium and thick fabrics in autumn and winter. The trend is good, many manufacturers are receiving orders well, the delivery date is also at the end of January, and the early inventory has been consumed. In addition, the price of raw materials has been rising frequently, which has driven the external selling prices of manufacturers, especially the inventory produced by low-price raw materials, which has also been sold at a better price than the previous period, and the actual profits of the company have improved.
Because of this, most market participants are still bullish on raw material prices after the Spring Festival. Therefore, the intention of enterprises to produce inventories this year is also better than in the previous period. In the words of a textile boss : “The current price of raw materials is still at a historical low. Even if there are no orders, the production inventory will not be lost.”
Of course, everything has two sides. On the other hand, the continued rise in raw materials may be the “last straw” that crushes the company.
After a long period of global consumption downturn, the pressure of overcapacity on the market has not been relieved. For some companies that are not doing well in receiving orders, the rapid rise in raw material costs has undoubtedly increased their financial pressure. Many companies whose inventories are difficult to cash out have not had a high overall operating rate this year. Especially after New Year’s Day, many companies in northern Jiangsu only maintain The reason for the operating rate of 50% to 60% is that the inventory is too high and the capital chain is tight.
“If market demand does not explode well after the Spring Festival, we will continue to be cautious when starting construction. After all, the first consideration is…�In terms of capital circulation, market competition is now under great pressure. For some large orders, old customers will lower prices. We can only absorb the increase in raw materials ourselves. ”
Undoubtedly, the differentiation of the market also makes textile people have different attitudes towards the increase in raw material prices. In any case, the price of polyester filament, which currently accounts for a relatively high proportion, has not been released. There are signs of an increase, but on the contrary, there has been a decline recently. At present, large-scale purchasing and stockpiling operations in the entire textile market have ended, and the boosting effect on the demand side has begun to weaken.
But no matter what, , it is impossible for the market to return to the low prices of May-June last year. Recently, the market has continued to hear news of price increases across the entire industry chain, such as disperse dye prices and freight rates continuing to rise. It can be seen that the cost of the textile market will still remain high in the future. There is a possibility of an increase. Maybe this year’s high price will be tomorrow’s low price!
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