The Inventory Got off Track, Could the Textile Industry Usher in the Bottom?

 Recently, the feedstock values began to rebound back, which were failed to follow the stable trends of last month. The peripheral bad news continuously stimulated the raw material market this month, the production and marketing also dropped back to the previous downturn from the normal levels. In addition, the inventory of the raw material market also picked up to the previous high levels. However, the weaving market went weak deeply along with the end of this peak season. Let’s analyze the problems on high inventory in order to judge the subsequent market situation, which was combined with the situation of the downstream weaving industry.

At present, owing to the bad factors from the raw material, the international crude oil price declined in fifth consecutive trading day since 19th, down 6.94%. Affected by this, the whole price of polyester products was weak and the spot market of polyester feedstock appeared different degrees of down. In addition, PTA price fell to 8,250 Yuan/ton from 8,350 Yuan/ton of early last week in domestic market. MEG price declined sharply, down 200 Yuan/ton, which was closed at 8,050 Yuan/ton by last week. The price of polyester products went down as a result of the sluggish cost support. The polyester yarn prices were still under the downward channel. The production-marketing and purchasing situation of the raw material also appeared different degrees of decline, the production and sales of the leading manufacturer were about 60%. The feedstock inventories rose to the high level from the previous normal level in this month.

Calculated from the sample enterprises monitoring diagram of the Eastern Silk Market, the average inventory of the polyester plants rose to 26 days from the original 15 days, which had a significant rebound in Oct. For many years, 15 days of the inventory in polyester industry belonged to the average normal level, but the existing 26 days of it significantly enlarged the inventory pressure of polyester plant. Driven by the autumn and winter market in the previous, the de-stocking process of polyester enterprise turned to speed up. However, the early hot products also began to slow down because of the plight of the downstream sales situation and uncertain news guidelines. Faced with the gradual saturation of the downstream weaving enterprise stocks, the weaving market would be mainly for consumption in early stocks. Therefore, the polyester plant inventory would be faced a further test.

The inventory of grey cloth appeared to rise and the trading volume was back.

 

Judged from the monitoring diagram of sample weaving enterprise inventory, the weaving enterprise inventory increased gradually in this month, the previous inventory pressure in the weaving enterprise was started to emerge and the inventory rebounded back to 47 days of the high level, which followed clearly to the rising trends. According to the monitoring diagram, the daily volume of the sample enterprise in the Eastern Silk Market presented the movements of the fall. It indicated that the market began to continue to weak.

Generally speaking, owing to a series of bad news such as high inventory of the polyester and weaving enterprise, high production and sales and low trading volume, which led the sluggish textile industry continue to spread. It expected that the textile market was difficult to improve and the fall was coming.