Will the fabric market improve in August?

 

    First, cost drove and feedstock stock was low

    In the first half year, the biggest pressure of polyester industry chain was the high stock of polyester factories which was difficult to digest. According to 168TEX data, the highest stock of polyester manufacturers achieved more than one month, which beyond the normal industry level for about 20 days. Take polyester FDY for example, due to the slump of downstream market and operation rate was low, so the raw materials demand was weak. The highest stock of polyester FDY was about for 23 days, while the stock in previous years was only about 10 days, and overall market trade atmosphere was sluggish. Along with the release of the macro good news and the rise of PX price, market price began to rise, and drove by the mentality of “ Buy the hike, not the drop”, the downstream stretched and weaving factories purchased actively. At present the average stock of polyester FDY was for 7 days or so, polyester DTY for 27 days, and polyester POY for five days, and the market confidence recovered. In the perspective of price, at present the FDY50D/48F price in Jiangsu market was 13,700 Yuan/ton, DTY150D/144F rose to 13,100 Yuan/ton, and POY150D/144 F quotation was 11,650 Yuan/ton, which increased 1,000 Yuan compared to previous time.

 

 

    Since entering July, the commodity and stock market started to rebound generally, plus the good influence of state macro-control, the weaving enterprises operation environment got relief to some degree, especially September was coming, which was the traditional peak season, the market confidence began to recover gradually, and the operation rate of weaving factory increased slightly. Such as the operation rate of elastic machine in early June maintained about 30%, while entering July, as the improvement of market purchasing atmosphere, it rebounded to 80%. Although the operation rate of water-jet loom didn’t increase obviously, manufacturers were obviously more positive to the market in August. On the other hand, the trade volume was also a main factor of market confidence, in late July, fabric market trade volume increased obviously, and market atmosphere was improved. Purchasing trend of fabrics in autumn and winter seasons increased, such as the price of polyester cotton peach and N/T fabric increased 0.10 Yuan/m and market sales condition was smooth, and the sales condition of pongee and nylon taffeta, also improved slightly.

 

 

Influenced by external environment such as Europe debt crisis, the market demand remained at the low point, which caused the grey fabric stock in fabric market recorded the new high compared to the stock in the same period and up to 50 days or above level. The sales condition of conventional chemical fiber fabrics, such as polyester taffeta, was not good and stocks increased dramatically, so the stock became unworthy. The factories fell into a dilemma, they will lose if they sell at low price and the trade will not be concluded if they maintain the previous price. With the raw material prices increased frequently, the stock prospect improved and the factories became reluctant to sell, which lead to the rise of fabric. The factories began to expect the rebound trend turned into the stock to profit.

    Generally, in the next period of time, influenced by the price support of upstream raw materials and increased downstream demand, the stock will probably be consumed, and lack of confidence will be eased. Although the fabric market in August can not compared with the same period last year, the fabric market is expected to seek better improvement opportunities.