Raw materials continue to strengthen, and conventional fabrics are in serious inventory

Recently, with the complicated geopolitical situation, the domestic epidemic also has different ups and downs. The textile market has also become volatile due to this impact.

Entering the traditional peak season of gold, silver and silver, can the market usher in a boom?

Regarding textile raw materials, the situation in Russia and Ukraine has entered a stage of fighting and talking, but the excitement of international oil prices has not subsided. Affected by this, textile raw materials have also been continuously raised, but the downstream "buying up" mentality has not been shown, and prices have been raised several times. The production and sales are respectively: 99.5%, 98%, 86%, the main performance is that the market has a stronger wait-and-see mood, the enthusiasm for downstream replenishment is sluggish, the spot sales in the textile market is still slow, and the inventory base is high. Currently, the gray fabric inventory in Jiangsu and Zhejiang is about 33.2 days. Crude oil rose hot, but downstream demand remained unchanged.

Epidemic one after another

First of all, the recent epidemic in Jiangsu has been properly, effectively and timely controlled. However, when the "Gold Three Silver Four" is about to open, some textile trade centers in Dongguan and Hangzhou are closed due to the epidemic. Dongguan Dalang Wool Trading Center was closed, and Hangzhou Sijiqing Clothing Street was closed.

In addition to the multi-point fermentation of the domestic epidemic, the textile trade centers in many places were temporarily closed, resulting in a continuous shrinking of the domestic textile market demand and a delay in the recovery period. In addition, affected by geopolitical conflicts, the international environment is complex, and the future situation is not clear, which will bring unpredictable effects to the textile and garment industry.

The number of downstream orders is not as expected

At present, the situation of oversupply in the market is still prominent, and the high inventory of conventional fabrics is also serious. Compared with the inventory of raw materials, the destocking pressure of grey fabrics is greater. Judging from the last two days, although it has entered the traditional peak season, the current sales situation of weaving enterprises is still difficult to open, and there are few products for sale, especially the conventional fabrics such as polyester taffeta, Chun Yafang and other products occupy a large market share. Sales were not as expected. This has led to the continuous increase of the inventory of weaving enterprises, and actually caused the inventory of raw materials to be transferred to the weaving enterprises to a certain extent, and this inventory pressure in the terminal market may be more dangerous than the inventory in polyester factories.

Under the current situation of high supply, weak demand and high inventory, polyester filament is more dependent on cost-side support in March. However, at present, polyester filament is following the rising trend of raw materials, and the focus of transactions has shifted upward, but it is far less than the growth of raw materials, so the cash flow has been greatly compressed. At present, the situation in Russia and Ukraine is changing. In the short term, oil prices are easy to rise and hard to fall. Under the support of the cost side, polyester filaments are also expected to rise, but I am afraid that the upward road will be bumpy.

Southeast Asian orders return to seize the market

Secondly, it is understood that the current market's foreign trade orders are generally weaker than domestic sales orders. As we all know, before the Spring Festival, foreign trade orders have improved significantly, and once became a hot spot in the market. But after the start of the year, the upward momentum has weakened, and it seems to have returned to the calm of last year. The operating rate of looms in Jiangsu and Zhejiang has finally risen to 71% after various misunderstandings, but compared with the same period last year, the operating rate has decreased by 9%. Through in-depth enterprise investigation, we found that most manufacturers currently receive orders with small orders. , large orders are still lacking. Although there is a lack of large orders, the overall executable orders of enterprises can be maintained until the end of March. March should have entered the peak season of traditional textile foreign trade demand, why did the orders not increase?

On the one hand, the reason is because of the recovery of production in Southeast Asia (statistics from the General Administration of Vietnam Customs show that in January 2022, the export value of handbags and umbrellas of Vietnamese leather shoe companies reached 390.3 million US dollars, and the export value of footwear products reached 1.937 billion US dollars) As well as the increase in domestic labor and operating costs, most orders have returned to Southeast Asian countries; on the other hand, the conflict between Russia and Ukraine will inevitably have a certain impact on foreign trade. Since the war incident, customers have received delayed payment and delayed delivery. Feedback for reducing order size. Some companies said that customers have not returned messages. In an environment where the state has declared a state of emergency, business activities are bound to be limited.

Generally speaking, in terms of the market outlook, it was found in the market research that the opinions of enterprises are not much different, and they are mainly pessimistic. Whether foreign trade can improve is still an important factor affecting the market. At present, there is a local heating trend in the weaving production base, and most of them are domestic small-batch summer orders. It is expected that the traditional peak season in the later period will not be as popular as imagined, but there will still be some orders released, and there will be some improvement.