Time flies, 2022 is about to pass halfway, and the textile market has also entered the traditional off-season in a tepid manner. Market orders are getting worse and worse, and polyester prices are getting higher and higher. The market has been paying attention to when polyester prices will fall!
Polyester prices may continue to rise
Due to the downturn in the textile market, the price of polyester yarn is mainly affected by the cost-end price. As the upstream of polyester yarn, every move in crude oil prices affects the trend of polyester yarn price. High crude oil prices are unlikely to allow polyester yarn prices to drop in the short term. Now crude oil continues to fluctuate at high levels, with WTI crude oil and Brent crude oil hovering around $120/barrel.
Weaving companies have become accustomed to the high polyester prices due to the “destruction” last year. With upstream prices rising, weaving companies can only change their purchasing strategies and stop stocking up! High raw material prices have caused some fabrics to be sold at a loss, and profits have been greatly reduced!
Speaking of profit compression, Mr. Wang, who sells women’s clothing fabrics, said: “There must be some selling at a loss. The cost of self-made fabrics plus freight may not be as good as the fabrics collected from other places. The main reason is that there are fewer orders due to the epidemic and the transfer of orders. , the current market does not recognize the price but the product, whoever is cheaper will sell better.”
Will the price of gray fabrics rise?
In the current textile market, flour is more expensive than bread. After the price increase of gray cloth, it is still unknown how much money our textile workers can make. It may only reduce the loss a little. No one can bear the loss of profits one after another! Selling at a loss can be tolerated for a month or two, but no one can afford it if things continue like this!
It is not easy to increase the price of gray fabrics. Price changes of raw materials are indeed an important indicator of whether weaving companies will raise prices, but more importantly, it depends on whether orders are sufficient and whether inventories are too high.
As Mr. Wang, who specializes in women’s clothing fabrics, said: “It is difficult to increase. The international situation is not good. The industrial chain in Vietnam is developing rapidly. Coupled with political factors, orders are being placed there.”
Mr. Hu, who specializes in elastic fabrics, also said: “The price of gray fabrics will not rise because there is a lot of inventory and the price cannot go up.”
Lack of orders, insufficient demand
Due to the epidemic and the traditional off-season, the reduction in orders has basically become the norm. In the absence of orders from textile companies, the factory can only be in a state of production inventory. After experiencing inventory backlogs and tight liquidity last year, most companies need to be more cautious this year. When orders have not improved, they are still unwilling to accumulate too much funds on raw materials or fabrics. It is a common practice for weaving companies to buy on demand and use as they go. Otherwise, it will just bear inventory and cost pressure for the polyester factory.
Mr. Zhang, who specializes in autumn and winter fabrics, said: “The current order situation is worse than in the previous period. The inventory of gray fabrics is 60 million meters, and the inventory is not moving.”
Another manager Zhang, who is mainly engaged in pongee fabrics, also said: “The order situation has declined seriously and there are basically no orders; customers are generally from Hong Kong and want to come over to communicate but cannot come due to the epidemic. Gray fabrics can be bought and used. If the market is not good, it will not Dare to advance more.”
Mr. Hu, who specializes in elastic fabrics, even said: “There are no orders this month, and this year is generally not good. I can’t take an order after finishing it. There is not much inventory of gray fabrics, about 10,000 meters. It has increased compared with the previous period, and there was basically no inventory before. in stock.”
As for the market outlook, from the current point of view, it will take some time for the market to recover. First, because it is currently in the traditional off-season, there are already fewer orders. Second, because of the repeated epidemics, purchasing power has decreased. Both domestic and foreign situations are different. Not particularly optimistic. Textile people still need to wait patiently.
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