The “market whirlwind” brought about by the Russia-Ukraine conflict is still blowing violently, sending oil prices skyrocketing. Affected by this, the domestic energy and chemical futures market continues to be popular. How will the downstream market be affected?
Businesses are back to normal and orders are being delivered one after another
After the Spring Festival, after experiencing an episode of the epidemic, most companies have now fully resumed operations and returned to normal, with their operating rates gradually increasing. Entering the traditional peak season of March, the order-taking situation of trading companies has gradually recovered and is steadily increasing. Through in-depth enterprise surveys, we found that most manufacturers currently receive mostly small orders, while large orders are still lacking. Although there is a lack of large orders, the company’s overall executable orders can be maintained until the end of March.
Mr. Hu, a main imitation silk trader, said: “Orders have been delivered one after another recently, and the market has basically returned to normal. Orders are OK, and imitation silk is still the main product. However, some dyeing factories still have a lot of goods and need to queue up, resulting in The delivery time is a bit long, it won’t be until the end of March.”
Manager Wang of a trading company that sells raw materials also said: “Recently, orders have been delivered one after another, and the orders are OK. Elastic fiber is the main product, such as T400, SPH and other raw materials are the most popular. In terms of downstream weaving companies, knitted fabrics are better, and large Some manufacturers will be rushing out orders before May Day.”
Geopolitical factors disrupt market orders
After the Spring Festival, Russia-Ukraine relations once became the focus of the market, and became the dominant factor in crude oil, raw materials and other factors. The tense relations between Russia and Ukraine and its impact on the textile market have become a matter of great concern.
It is understood that the current situation of foreign trade orders in the market is average and weaker than domestic orders. As we all know, before the Spring Festival, foreign trade orders improved significantly and became a hot spot in the market. But after the start of the new year, this upward trend weakened, and it seemed to have returned to the calmness of last year.
Manager Wang, who sells raw materials, revealed: “Foreign trade orders are basically made of recycled fiber, which has been a hot topic in recent years. However, the current order situation is not very ideal and is worse than last year. It is mainly affected by the Russia-Ukraine war, rising crude oil, and cost The market has become higher, profits have declined, and foreign customers feel that the situation is unstable, so they have been waiting and watching.”
The current global situation is tight, and due to the uncertainties in demand and rising external energy prices, the uncertainty and volatility in the operation of the textile industry may intensify. Affected by this, it has become normal for clothing sellers to wait and see for a long time without placing orders. Therefore, the number of orders received by downstream fabric trading companies has decreased, and the atmosphere for receiving orders has weakened.
Sea freight rates are “high fever” and customers continue to wait and see
Of course, some companies say that the situation in Russia and Ukraine will have little impact on order acceptance. The most important reason is that there are not many foreign trade orders, so naturally there is not much impact. There are few foreign trade orders and are still affected by the reduction in terminal demand. The general environment has not been improved to a limited extent, and it is difficult for the foreign trade market to truly improve.
Mr. Hu, a trader in artificial silk, also said that foreign trade orders were not as good as at the end of last year, and the order volume had declined. Mainly because sea freight continues to rise and the price is outrageous, making it difficult for most overseas customers to afford this cost. In addition, overseas demand has a greater impact on the foreign trade market.
Since the outbreak of the epidemic, the price of sea freight has been rising continuously, and the “high fever persists”, which has a great impact on foreign trade companies. It is understood that sea freight rates have risen globally. China-US and China-Europe routes have increased nearly 10 times, and have increased to more than 3 times globally. Such crazy sea freight has become a big mountain blocking the foreign trade market.
It is difficult to raise fabric prices, and corporate profits are lost
As Golden Day approaches, whether spring orders can be placed downstream and whether the price of gray fabrics can be raised has become a more eye-catching matter. Companies all said that the order volume is small and it is difficult to raise prices for regular products. The increase in spring and summer fabrics is generally within the range of 2-3 cents.
Mr. Wang, a raw material trader, said: “The recent rise in yarn prices is mainly due to differentiated products, and conventional products are not getting better. The current market has many small orders and few large orders, and there is a lot of inventory. Many spring and summer fabrics this year are also The consumption last year was the same as the year before, so it is still difficult for demand to improve.”
Mr. Tang, who specializes in elastic fabrics, told the editor that as the prices of raw materials and gray fabrics increased, the price of fabrics has also been increased, ranging from 0.1 to 0.2 yuan/meter, but the profit margin is still not large.
“The price of gray fabrics has increased, 0.1-0.2 yuan/meter, but the price of fabrics cannot rise.” Mr. Hu, an imitation silk trader, said he was helpless.
Price increases seem to be even more difficult for downstream companies. Although this statement is an exaggeration, it is indeed difficult. Upstream raw materials have begun to rise under the strong support of crude oil costs, but downstream demand is not strong, and some weaving companies are selling gray fabrics at low prices. Currently the upstream and downstream do not matchThe situation will continue. Under the control of Big Brother Crude Oil, the price difference between upstream and downstream raw materials will only widen wider. Summary
In terms of market outlook, there is little difference in corporate opinions, with most of them being pessimistic. Whether foreign trade can improve is still an important factor affecting the market.
Ms. Zhang, a trader in women’s clothing fabrics, predicted: “Nowadays, there are many small orders, and they are mainly based on proofing. The terminals are still digesting last year’s clothing inventory, so I am not too optimistic about Jinsan.”
Mr. Tang of elastic fabrics also predicts that the traditional peak season will not be as popular as expected, but there will still be some orders released, and there will be some improvement.
