Buy Fabric Fabric News Crude oil crashes, polyester production cuts, and dyeing costs rise. Why are textile workers always the ones hurt?

Crude oil crashes, polyester production cuts, and dyeing costs rise. Why are textile workers always the ones hurt?



U.S. and Burundi oil prices continued to decline following last week’s decline, and have almost given up all their gains. The price of U.S. WTI crude oil futures for delivery…

U.S. and Burundi oil prices continued to decline following last week’s decline, and have almost given up all their gains. The price of U.S. WTI crude oil futures for delivery in April is currently at US$101.78 per barrel, a decrease of 6.74%, and once fell below the US$100 per barrel mark during the day; the price of Brent crude oil for delivery in May is now at US$105.13 per barrel. The decrease was 6.42%.

Crude oil and polyester products “flash crash”

Affected by this, PTA also fell sharply in the market, falling by 575 yuan/ton from last Thursday, a decrease of 8.85%.

It can be said that with the continuous decline of international oil prices, upstream crude oil has gradually transformed from the original support of polyester filament prices to the driving force of the decline in polyester filament prices. Although the surge in oil prices failed to boost polyester filament prices, it gave it a stable price support. Now that oil prices have continued to fall, polyester filament yarns have fallen immediately. Although it is not a general decline, some companies have begun to loosen their prices.

The price of polyester yarn from Xiaoshan Factory No. 1 was lowered by RMB 150 today

The polyester yarn quotation of another factory in Hangzhou is stable today, with discounts ranging from 300-500 for actual orders

It was at this time that a series of chemical companies, including polyester factories, began to reduce production. Taking PTA as an example, with the fluctuation of international oil prices in the early stage, the processing fee level of PTA was compressed to a historically low level. Therefore, major PTA factories have started their own maintenance plans.

A 600,000-ton PTA unit in East China is scheduled to be shut down for maintenance on March 14, and is tentatively scheduled to be maintained until early May.

A 2.2 million-ton PTA unit in East China is scheduled to be shut down for maintenance in mid-March and is tentatively scheduled to last for about 8 days.

The 2.5 million-ton unit of Hengli Petrochemical’s No. 4 PTA production line began shutting down for maintenance on March 10, and the restart time is to be determined.

Rongsheng’s 100,000-ton FDY unit was shut down for maintenance.


Shaoxing Tiansheng Chemical Fiber Polyester Filament Facility will inspect some production lines on a daily basis on March 15 and reduce production by 450 tons / days, involving varieties FDY, and the restart time has not been determined.

According to data monitoring from China Silk City Network, the average operating rate of PTA in the second week of March was 67.6%, down 0.4% from last week; the real-time operating rate was 67.7%, and the real-time effective operating rate was 75.9%. This data has historically is also at a low level.

Downstream dyeing fees rise for the first time

In the commodity market driven by rising oil prices, various energy and chemical materials have also experienced substantial increases. On March 6, the price of disperse dyes increased by 1,000 yuan/ton. On March 8, some thermal power plants also issued notices of rising steam levels. Subsequently, on March 9, some printing and dyeing factories in Shantou, Guangdong and Shaoxing, Zhejiang began to adjust dyeing and finishing processing costs due to the sharp increase in energy and dye costs, most of which were 500 yuan per ton.

When international oil prices and bulk commodities began to fall, textile workers had not yet begun to enjoy this joy, but they received a blow. Dyeing costs have really gone up! For terminal textile companies, they are faced with two situations. One is the weak textile market due to the sharp rise and fall in international oil prices, and the other is the rising costs due to factors such as raw materials and the epidemic.

Amidst the turmoil in the global economy and political situation, middle-end trading companies are under the most pressure. As a “sandwich”, you can really feel the pressure of squeezing. There are various increases on the cost side, and most of this increase is borne and digested by ourselves. At the bottom, there is pressure from end customers to lower prices and reduce order volume. The increase in dyeing fees is not easy for textile traders to accept. After all, the current profit of finished fabrics is generally around 10%. The direct profit of many fabrics is less than 1 yuan/meter. A single increase in dyeing fees swallows up 10%- 20% profit.

But what is more terrifying than the reduction in profits is that it is supposed to be the traditional peak season, but now there is no peak season at all. The editor originally predicted based on the orders received by companies after the Spring Festival this year that when the country’s economy gradually improves and the backlog of demand in the textile market is released, production capacity will increase, and there may be an explosion of orders. butJudging from the current situation, things do not seem to be developing in the expected direction. In particular, the resurgence of the epidemic has once again disrupted the entire industry, and the market has also suffered a sharp decline due to this impact. Many textile bosses said that there is a lack of large orders, the order volume has been significantly reduced, and there are even price reduction operations, which makes it more difficult for textile bosses to receive orders than in previous years.

The current market is in a very confusing state. The phenomenon of polarization has always existed, but to put it bluntly, the demand is still insufficient. The epidemic has not been controlled, terminal demand has not been boosted enough, and part of the market was overdrafted at the end of last year. This year’s order situation may not perform as expected, but under the premise that the market situation in April is still unknown, it is still worth looking forward to.
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Author: clsrich

 
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