After a tepid March, the textile market in April seems to have undergone new changes. For weaving enterprises, dyeing fees and raw material prices are direct factors affecting costs, and changes are concentrated in these two aspects.
A new round of price increases in dyeing fees
Recently, when the editor was checking Moments, I found that the long-lost dye fee increase notice appeared again.
The reason given by the dyeing factory for the increase in dyeing fees is that the recent increase in the prices of steam and coal, etc., has led to an increase in production costs. The price increase time given by the company is April 21, giving weaving companies a two-week buffer time.
This dyeing fee increase notice was issued at the end of March, and the reason given was the increase in steam and raw material prices.
At the same time, the editor learned from fabric companies that many dyeing factories do not have direct price lists, and the price is mainly determined by negotiation, and there is relatively large leeway. When the overall dyeing fee in the market rises, the price offered by the dyeing factory will rise. Recently, the dyeing fees reported to them by dyeing factories have been higher than some time ago.
Polyester filament prices stop falling and rebound
While dyeing costs are rising, the editor also discovered something interesting. According to data monitoring from China Silk Capital Network, the price of polyester filament, which had been falling for more than a month, actually stabilized at the end of March and rebounded slightly after the Tomb Sweeping Day holiday.
Although the increase is not large, the rebound after falling for more than a month in a row represents a trend of market recovery.
Cause analysis
1. Environmental factors
Environmental protection has been a hot topic since last year. One year has passed, and the enthusiasm for environmental protection has not subsided at all. On the contrary, it has become more and more intense.
Due to their own characteristics, printing and dyeing companies are very sensitive to environmental protection. Whenever there is a sound of wind and grass above, there will be a roar of wind and cranes below.
On the one hand, we can see from the price increase list that the direct reason given by printing and dyeing companies for this round of price increases is the increase in steam and raw material prices, and the main reason for the increase in steam prices is environmental protection. “Coal to gas”.
On the other hand, because the government attaches great importance to environmental protection, the country’s environmental protection is under high pressure this year. For textile industry clusters such as Wujiang and Keqiao, the focus of government departments’ monitoring will inevitably be on dyeing and finishing enterprises.
In March alone, 16 heads of printing and dyeing companies in the Keqiao area were detained for secretly photographing and failing to discharge workers. Wujiang even adopted a “reward reporting” method to prevent companies from surreptitiously photographing workers.
After the editor learned from the dyeing factories in the early stage, as far as the Wujiang area is concerned, because the business in March was average, the dyeing fees in the entire Wujiang area did not increase significantly in March. However, due to the “coal-to-gas” change and the rise in raw materials, the costs of printing and dyeing companies have actually increased to a great extent.
2. Oil prices rise
For polyester filament, whether PTA or MEG, the original raw material is petroleum.
From the chart above, we can clearly see that since the end of March, international crude oil prices have rebounded directly, and the magnitude of the rebound is not small.
At the same time, due to news that is good for oil prices such as Trump’s attack on Syria and OPEC’s production restrictions, the future oil price will still be mainly bullish.
3. Market recovery
At the end of March, the cloth factory conducted a survey on the market in March, and finally received 184 votes, including 117 people, about 64% of whom believed that the market in March this year was worse than in previous years, and believed that the market this year was better than last year. There were only 35 people, accounting for only 19% of the total voters.
Everyone has clothing needs for food, clothing, housing, and transportation, so we can regard the annual demand for fabrics as a “rigid need.” Because raw material prices were previously too high, this demand was suppressed on the surface, resulting in a tepid market in March.
After the sharp drop in raw material prices in March, raw material prices have begun to return to a reasonable range, and demand from the entire market will eventually be released.
Once the market picks up, both printing and dyeing companies that are suffering from environmental protection pressure and the major giants that have the pricing power of polyester filament will have reasons and motivation to increase prices.
4. The establishment of Xiongan New Area
Why do we talk about Xiongan New Area? In fact, the editor doesn’t know, but it’s been talked about these days. If the editor doesn’t say this, it seems that he doesn’t keep up with the trend. You just think it’s because after the establishment of Xiongan New Area, everyone suddenly used their money to speculate in real estate. As a result, real estate speculation was controlled by the government, and there was no place to spend the money. All kinds of commodities were speculated everywhere. Anyway, I just said this to keep up with the fashion, so you can just take a look at it.
Dyeing fees are basically certain to rise. Although polyester may not necessarily rise, it will be very difficult for it to fall again. Faced with April like this, cloth bosses should prepare early!
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