A typhoon made the entire raw material market float again! On September 13, the domestic futures market rose broadly, with the energy and chemical sector turning red across the board. PTA and ethylene glycol rose by more than 4%, and short fiber rose by more than 3% during the session. The popularity of futures brought excitement to the spot market, and PTA factories Taking advantage of the opportunity to increase prices for shipments, polyester production and sales rebounded again, and the market became excited.
A long-lost scene was staged again, and the red scene all over the screen caught the textile people off guard! As for the reasons for the increase, in addition to the improvement in demand expectations brought about by the traditional peak season that everyone is familiar with, the production decline caused by the previous power cuts is gradually increasing, which also provides considerable impetus for the market to rise. Of course, there is also the influence of the typhoon that everyone “loves to hate”! The arrival of super typhoon Meihua will have a significant short-term impact on the shipping of polyester raw materials along the coast.
However, in the editor’s opinion, there is still too much speculation in the market, and the market may return to the state before the epidemic. Because compared with before the epidemic, the overall environment for textile and chemical fibers has not changed significantly. It still faces problems such as overcapacity and a sluggish apparel industry. It is difficult for the market demand for textiles to increase significantly in a short period of time. or decrease. Weaving companies will continue to be under pressure from inventory, sales and other aspects. At the end of the year, due to inventory problems, a situation similar to the “high temperature holiday” in August is likely to occur again, and then it will become an “early annual holiday.”
The market has reached the traditional peak season of “Golden September and Silver October”, but the peak season performance is unsatisfactory and the gap is larger than expected. In August, the market has shown some signs of starting. The sales of cotton yarn and gray fabrics have improved, the order volume has increased, and the operating rates of yarn mills and looms have increased. Most merchants have certain expectations for the “Golden Nine and Silver Ten”.
After entering September, in the first half of the “Golden September”, the market basically continued the previous trend and did not improve further. In terms of downstream weaving, last month, the shipment of gray fabrics improved month-on-month, the inventory dropped overall, and the operating rate of looms in Foshan, Nantong, Shaoxing and other places rebounded. As of now, the overall rate remains around 60%. This year, downstream merchants basically maintained rigid purchases, and weaving factories mainly determined production based on sales. After orders were placed in batches last month, purchasing demand rebounded. Therefore, many manufacturers have a certain amount of stockpiles, but new orders are limited and subsequent orders are insufficient.
There is still some uncertainty as to whether the traditional peak season of “Golden September and Silver October” has come to nothing. According to information from the market, most of the current production orders are for thick fabrics such as Chinese cotton fabrics and sweatshirt fabrics, and most of them are autumn and winter orders. Many merchants said that orders for spring and summer have not yet been placed on the market. As for whether the market outlook for the peak season can continue to improve, further attention needs to be paid to the situation of orders for spring and summer.
Overall, after entering the peak season, the market has seen limited improvement. Although orders have continued, they are still worse than in previous peak seasons. The price of cotton yarn remains stable and the market fluctuates little. The operation of downstream merchants is relatively differentiated. Some large manufacturers receive a large number of orders, the delivery date of some orders is urgent, the startup load is high, and the production has improved significantly. Some manufacturers also have small orders, so downstream looms will inevitably start and stop repeatedly. Regarding the specific market outlook, we still need to pay attention to the placement of orders in spring and summer, and whether downstream textile and apparel consumption can pick up.
For upstream polyester, it has experienced several failed speculations and a sharp rise in raw material prices in the short term has become an “impossible mission.” After September, as the textile market improves and overall demand picks up, raw material prices may rise for a while, but it will be difficult to raise thousands of yuan in the short term like in previous years because the fundamentals no longer allow it.
In the absence of obvious guiding factors, once unexpected events occur in the industry, the market will start to rise as if “grasping at straws”, so that once the benefits dissipate, the price trend will once again become confused and stagnant. All in all, if the raw material market relies on unexpected events to drive growth, there is inherently a speculative mentality. For the upcoming traditional peak season of the market, everyone should try to treat it with a normal mind!