According to data from the General Administration of Customs, from January to February, my country’s textile and apparel exports were US$40.84 billion, a year-on-year decrease of 18.5% (a year-on-year decrease of 11.6% in RMB). Among them, textile exports were US$19.16 billion, a year-on-year decrease of 22.4% (a year-on-year decrease of 15.9% in RMB); clothing exports were US$21.68 billion, a year-on-year decrease of 14.7% (a year-on-year decrease of 7.5% in RMB).
Although the export sales data of textiles and clothing dropped significantly, domestic sales were well supported.
Since mid-February, the start-up load of downstream polyester yarn texturing, weaving, and printing and dyeing has basically fluctuated at a high level. Texturing, looms, and printing and dyeing in Jiangsu and Zhejiang have basically fluctuated in a narrow range around 90%, 75%, and 85%.
Texturing, loom, printing and dyeing operating rate (%)
And due to the smooth order and shipment performance of seasonal spring and summer clothing fabrics and home textile brushed fabrics, the overall gray fabric inventory can basically be maintained. At the same time, there are certain orders, and the terminal texturing and weaving factories have certain raw materials in stock. Since mid-February, the average inventory of raw materials at the terminal has basically fluctuated around 10-15 days.
With high terminal operation and certain raw material speculation, the rigid demand and speculative demand for polyester yarn have performed relatively well. Although polyester factories have added 1.26 million tons of new production capacity since February, the overall inventory has not increased significantly yet. The equity inventory of polyester yarn factories in Jiangsu and Zhejiang is basically maintained at around 20 days.
Polyester yarn production and sales in Jiangsu and Zhejiang (7-day moving average)
Jiangsu and Zhejiang polyester factory equity inventory (days)
From a staged perspective, overseas exports of textiles and clothing are still under pressure due to the suppression of consumption capacity and consumer confidence in major developed markets. Domestic sales orders are already at seasonal highs, and the benefits to the start of production are limited.
With construction at a high level, the price transmission of terminals has not been smooth yet, and losses in many segments remain.
Polyester yarn price and polymerization cost (yuan/ton)
Since late February, the price of regular specifications of polyester yarn has increased by around 250-350 yuan/ton. However, compared with the better benefits of upstream PX and the poor processing of PTA, which have also been significantly improved, the benefits of polyester and its downstream are still not optimistic. The cost line of pre-spun FDY is hovering up and down, and POY’s cash flow performance is at a loss; the mainstream specifications of DTY retail investors are mostly at a loss in cash flow, especially the fine denier warp varieties.
Black swan gradually evolves into reality? Polyester chain collectively under pressure
This week the United States holds a congressional hearing, and the market is intensively trading on the extent of the Fed’s interest rate hike in March and the level of terminal interest rates. In the early stage, the market generally interpreted the Fed’s 50 basis point interest rate hike in March as a black swan event, because the Fed has slowed down its pace in the early stage. If it returns to the 50 basis point rate hike in March, it will send a bad signal to the market. In addition, it will also have a certain negative impact on the Fed’s own credibility.
Daily chart of major asset prices
Overseas interest rate hike expectations are rising, while the domestic macro environment is facing doubts that the economic recovery will not be as good as expected. Last weekend, the government work report set a GDP target of around 5% this year, which is lower than the market’s early expected growth rate of around 5.5%. The conservative economic growth target has further aggravated the market’s doubts about the degree of future economic recovery.
The superposition of domestic and foreign macroeconomic sentiments has caused asset prices to generally fall, chemical product prices to be collectively under pressure, and futures prices in the polyester industry chain to fall simultaneously.
Chart 3 PX&PTA processing difference trend chart
Specifically, PTA, which currently has strong fundamentals in the polyester industry chain, has also begun to fall. After experiencing a rapid rise in the market in the early stage, PTA processing fees have expanded rapidly. As of March 8, the processing fees have risen to 448 yuan/ton. From an absolute price point of view, the market price is also at the upper edge of the range, with limited room for continued growth, and the driving force is gradually declining.
But at the same time, it is worth noting that although PTA has weakened under pressure, spot prices and basis are still strengthening. Under the pattern of destocking in the next 3-4 months, spot prices will continue to be tight, even if the market��It has weakened due to external influences, and the trend of stronger spot basis is expected to be difficult to change.
For ethylene glycol, another polyester raw material, the supply and demand fundamentals have recently weakened month-on-month. Superimposed on external influences, the price has fallen smoothly. With the increase in coal chemical industry load and the return of imported goods, the extent of ethylene glycol destocking was less than expected. The extent of ethylene glycol destocking from March to May was revised down to around 200,000 tons, while the previous estimate was around 500,000 tons.
</p
