demand side
Although the number and quality of orders in September this year did not rise, the total demand in the entire autumn and winter market will not change much. For clothing brands, the manufacturing cost of clothing is much lower than its marketing cost. The increase in the cost of grey fabrics actually has a limited impact on ready-to-wear brands.
In terms of exports, although affected by the Sino-US trade war and exchange rate, this year's foreign trade enterprises have a difficult time, but because it is difficult for Southeast Asian countries in the textile industry to challenge China's low level in a short period of time, China Textile is still difficult to replace in the short term.
cost side
On the evening of September 24, the price of Brent crude oil in the United Kingdom exceeded US$80 per barrel, setting a new high for the rebound after the international oil price fell sharply in 2015.
As of the close, WTI November crude oil futures closed up $1.30, or 1.84%, at $72.08 per barrel. Brent crude oil futures for November ended up $2.40, or 3.05%, at $81.20 a barrel, a new closing high since November 2014.
The sudden rise of crude oil supports the price of polyester products from the cost side. Under the action of crude oil, PX began to stop falling and rebounded, and the spot price of PTA also stabilized. It is believed that the price of polyester filament will be stable soon.
supply side
After September, as the price of polyester products began to fall, production and sales weakened. Various major factories have started production reduction plans.
In terms of PTA, according to statistics, the average operating rate of PTA has dropped to 75.1%, the real-time operating rate is 75.1%, and the effective operating rate is concentrated at 84.9%. Market outlook news shows that a 1.5 million-ton PTA unit in East China is scheduled to be shut down for maintenance on the 23rd of this month, and is expected to last for about a month; another 1.2 million-ton PTA unit in East China is expected to be overhauled for three weeks from October 3.
In terms of polyester filament yarn, affected by low production and sales, polyester factories have begun to frequently reduce production and stop production. As of now, the operating rate of polyester has dropped to 80.01%.
Downstream Weaving
Compared with PTA and polyester filament factories, downstream weaving fabric enterprises are smaller in size, more dispersed, and have lower tolerance for raw material changes.
The profit of traditional weaving factories is often only about 5%, but the increase of polyester filament has exceeded 40% in one month. Even if the profits of conventional products in the first half of this year are better, they will not be able to withstand such a rise in costs.
Some enterprises that could not bear it began to limit production and stop production, and traders could not place orders. If the price is too high, it will not make any money, but if the price is too low, the high price of raw materials also discourages manufacturers.
September is the traditional peak season for textiles. In September last year, dyeing factories burst into warehouses, and orders of various sizes emerged in an endless stream. Manufacturers can’t wait to expand their production capacity several times. Basically, they can sell as much cloth as they have. When the price falls, everyone is waiting to see when the price will come down. Under the mentality of buying up and not buying down, the textile market in September this year was tepid and could no longer afford the name of "peak season".
Although the "Golden Nine" has not yet arrived, the "Silver Ten" can be expected!