The machine can’t stop, and the production can’t be sold. Cloth bosses are having a hard time! But to make matters worse, the prices of raw materials have begun to rise!
It can be said that the days of weaving enterprises have been very difficult recently. There is overcapacity in the market and the cloth produced cannot be sold. However, the machines cannot stop for various reasons, so they can only produce more. There are more conventional products on the market, and the cloth cannot be sold even more.
In such a cold market, factors such as increasingly tight environmental protection, safety supervision and the intensifying Sino-US trade friction have become a big mountain pressing on Boss Bu’s head, and During this period of time, the falling raw material prices may be one of the few good news that can directly benefit cloth bosses.
But the problem is coming, the price of raw materials has also begun to rise.
Production and sales exploded, PTA rose to the limit, and raw materials resumed their upward path
Last Sunday (June 9), the average production and sales of polyester factories exceeded 200%, and the production and sales of some factories even reached more than 500%, and some factories sold directly to the closing price.
It can be said that after nearly two weeks of tepid production and sales at around 40% to 50%, the polyester factory has experienced another big outbreak. What is the reason for this? What about an outbreak?
PX rarely rises
The closing price of the Asian PX market last Friday (June 7) was 859.67 US dollars / ton CFR China, US$840.67/ton FOB South Korea, an increase of US$45.67/ton from the previous trading day.
Since the Hengli PX device was put into production in March this year, PX has been in a slump. This time it has experienced a rare rise. The rise of PX is due to fundamental reasons such as cost, supply and demand, etc. There are also factors of capital speculation.
But regardless of the reason, the final result is that PX has risen sharply in the short term, injecting a new wave of upward momentum into the polyester industry chain.
PTA futures daily limit
Subject to With the dual benefits of the cost of upstream raw material PX and the explosion of production and sales of downstream polyester factories, PTA futures were all red on Monday (June 10).
As of the close of June 10, the closing price of the main 1909 contract of PTA futures was 5320 points, an increase of 182 points or 3.54% from the previous trading day. Except for the main 1909, the other contracts also rose to varying degrees.
Polyester prices began to rise
Affected by the recovery in production and sales and the sharp increase in upstream PTA, on Monday (June 10th), the price of polyester filament has also begun to rise, with the increase generally around 100-200 yuan/ton.
It is expected that the price of polyester filament will continue to rise in the future.
Raw materials rise in the off-season, is it a timely help or to make matters worse?
With overcapacity and sluggish market conditions, the terminal weaving market is already bleak. At this time, rising raw material costs will have what impact will it have on weaving companies?
The last straw that broke the camel’s back
Now, many weaving bosses are already worried about stopping production, reducing production and not starting work. The company is wavering between halting production and restarting operations.
Don’t stop production. The fabric produced cannot be sold. Even if it is sold, it is still selling at a loss or even at a loss. Everyone is selling goods. Sometimes, even if you sell at a loss, you may not be able to ship the goods. Inventory As it accumulates day by day, the pressure on capital turnover is getting bigger and bigger; but if we stop production, on the one hand, all the workers will be gone. Once we stop, it will be difficult to start work again. On the other hand, it will give people the impression of poor management and affect confidence. Not to mention that if production is stopped, rent, water and electricity must still be paid, so no one wants to stop production unless it is a last resort.
Originally, the low price of raw materials was a reason to support their production. Now that this reason is no longer valid, will it make them determined to reduce production?
Crisis? Or a transfer?
There is an old Chinese saying that if you have too many debts, you don’t have to worry; if you have too many lice, you don’t have to itch. Some cloth bosses will think, under the pressure from all parties, the current market is already so miserable, what does it matter if it gets worse?
What’s more, this may not be a turning point.
On the one hand, in China’s textile market, there are many cases of buying up and not buying down. Previously, the price of raw material polyester filament had been falling, the price of gray fabrics was also falling, and the order situation in the market was not good, so there was no reason to raise the price. This time, the collective price increase in the polyester industry chain may be able to “brake” the falling prices of gray fabrics. If the price of gray fabrics has an expected upward trend, and fabric manufacturers have some willingness to stock up, it may bring about a wave of sales of conventional products and help weaving companies reduce pressure.
AnotherOn the other hand, the current weaving enterprises are already struggling very hard. Factors such as initial investment, loans, inventory, environmental protection, safety supervision, and Sino-US trade have put great pressure on them. Will the increase in raw material prices affect them? Will it be the “last straw that breaks the camel’s back”? Once some weaving companies cannot hold on and start to limit production, the relationship between supply and demand in the market will be reversed, and everything may develop for the better.
This round of rising raw material prices may put weaving companies under greater pressure in the short term, but the disaster Where good fortune lies, there lies misfortune. This may be another opportunity for the prosperity of the weaving market to rebound. When the “hot, wind, fire” upstream raw materials encounter the “cold as ice” terminal weaving, what will be the final impact? let us wait and see. </p
