Sluggish Market and Hard Improvement-Current Raw Materials and Fabrics Market Analysis

    Once in the first half of this year, a parts of textile factories forecasted optimistically that the market situation will be not too bad in the next half year. However, it is already the middle November, the good time once be expected has not came in fact. In contrast, most manufacturers began to worry about the market condition because the demand was low, and the stock of raw materials and fabrics increased continuously. The news of factories stopping and limiting production appeared all the time and the market was so sluggish.   

    From Jan to Sep, the chemical fiber industry still in the prosperous market, soon the market changed, since 22^nd, Sep, the PFY inflection point appeared and factories always worried about the low demand, stock pressure and financing difficulties. During the recent two mouths, the average price of PFY dropped 2,500 Yuan/Ton, for example, the quotation of a main factory in Shengze was 17,700 Yuan/Ton on 22^nd, Sep, but by 17^th, Nov, the quotation dropped to 13,900 Yuan/Ton. Though, the PFY market price rebounded temporarily this week, it still can’t escape the drop trend influenced by the terminal demand. Though the production and sales increased and above 100% overall, but it dropped compared to tow days before. The PTA futures price was also fluctuating and PFY lacked of favorable news support.
    Except for polyester yarns, cotton market is also weak. Because of the differences of enterprises attitudes, cotton prices fluctuated always in the bottom. Recently, the domestic cotton picking work has already done, though the cotton harvest was good this year, the cotton farmers didn’t harvest good. Influenced by drop seed price, now the cotton seed purchasing price dropped 0.10 Yuan/Catty compared to the beginning of this mouth, which lower than the expectation of cotton farmers, and they were reluctant to sell and not positive. 

    It is already the middle of November, fabric factories were still waiting for the replenishing tide, but as the “gold September and sliver October”, it was not appearing. Though most fabrics market quotation was steady, several fabric prices changed slightly influenced by the raw materials price and low demand. Take Shengze area for example, the conventional fabrics price such as PFY oxford, polyester taffeta and taslon dropped now and then, and the 150D*150D oxford dropped 0.10 Yuan/meter to 2.5 Yuan. With the coming of winter seasons, factories increased the heavy polyester fabrics such as peach skin price slightly. But it is reflected that the sell condition was not as good as the same period of last year, the factories faced overstock and shortage of capital pressure, plus the increasing weaving cost in recent years, the profit scope has been compressed to the lowest point. Take 210T nylon taffeta for example, calculating nylon semi-dull DTY70D by 32,200 Yuan/Ton on 31^st, Oct, the cost of the fabric was 3.08 Yuan, and the quotation including tax was 4.3Yuan/meter in the market. According to the cost plus weaving cost, the profit scope of 210T nylon taffeta was really low. The Low demand and compressed profit scope made some factories took a vacation in advance. 

    Traditionally, November and December were the good time for exporting. But judged by current situation, the export will not be very good. According to the Customs data, the export value of textiles and apparels was 19.65 billion USD, which increased 10.4% in Oct, among which the textiles export value was 7.45 billion USD, which increased 18.4% and the apparels export value was 12.2 billion USD, which increased only 6% and the growth rate was lower than textiles. The textiles and apparels export value dropped 14.5% M-to-M, among which textiles dropped 6.3% and apparels dropped 18.8%. This is the third consecutive drop month, which reflected the sluggish fabric industry chain.    

    From the point of whole fabric market, the orders of factories began to be limited, and the market was oversupplied. The market operating rate was limited and the production efficiency of enterprises dropped, and it is not easy for market improvement.