Market Analysis: Textile Raw Material Market In The Future Peak Season Demand Can Get Rid Of The Weak Position

 

The sluggish performance of textile industry chain terminal demand not only makes the cotton market "weak inside but strong outside", but also drags PTA, staple fiber, ethylene glycol and other varieties continue to weaken. On the 19th, PTA and staple fiber both fell more than 2%, and continued the downward trend in the week. Although ethylene glycol fell by less than 1%, it still hovered near the low level since December 202.

Looking forward to the future, under the background of weak improvement of terminal demand and accumulation pressure of polyester industry, the price trend of textile raw materials such as PTA and staple fiber is difficult to be optimistic. Whether the coming "golden nine silver ten" traditional peak season can be realized in the future also becomes the key to whether the price of textile raw materials can get out of the weak position.

In the near future, the trend of crude oil price / crude oil price in the near future was stronger than that in the downstream of SC, but the focus of crude oil price in the near future was stronger than that in the domestic oil price, especially in the chemical industry.

Since June, the textile industry chain as a whole has turned into the off-season of traditional consumption. The high price and weak demand make the rise of PTA, staple fiber and other raw materials in the first half of the year "abruptly stopped". Coupled with the US Federal Reserve's substantial interest rate hike and the commodity market's "recession trading" heating up, PTA and staple fiber futures prices fell by 32% and 26% respectively from the maximum in one month.

Although the rigid demand procurement of polyester industry has promoted the price of relevant varieties to a certain extent since the middle of July, under the influence of off-season effect and the impact of epidemic situation on textile and clothing consumption, so far, the improvement of polyester demand is still limited. Longzhong information data shows that since August, the polyester, weaving industry operating load drop in the vicinity of 2%. As of August 18, the operating load was 80.61% and 45.44% respectively.

According to a survey released by China Cotton Textile Industry Association on the 19th, the sales of yarn enterprises in some regions of China have not improved significantly, the downstream demand is still depressed, the product inventory is still in an increasing state, and the inventory pressure of enterprises in some regions is still large.

In addition, in recent days, East China, central China and Sichuan Province have continued to break records, and power consumption has soared, and power rationing has "made a comeback", which has an increasingly obvious impact on the entire industrial chain of cotton spinning, weaving, printing and dyeing, clothing and so on.

While the downstream demand is still weak, the supply of PTA and staple fiber is increasing with the restart and production increase of early maintenance units.

Although PTA plant restart and maintenance coexist this week, the overall supply performance is incremental. As of August 18, domestic PTA production was 950500 tons, an increase of 19000 tons compared with last week and a decrease of 41700 tons compared with the same period.

The short-term PTA fundamentals lack of substantial positive, market supply growth and demand contraction trend is prominent, supply increase is greater than the demand contraction, but PX supply is still tight and there are factories continue to buy, or slightly offset the market short-term expectation. During this period, we focus on the supporting effect of crude oil rebound on the market, and the short-term expectation of PTA market price is mainly stable and weak.

Crude oil price is weak recently, PX processing cost is overestimated, PTA maintenance is increased and processing cost is strong, but TA processing cost has been overestimated under the background of weak demand. Contract 09 in recent months is stronger due to low inventory in real society, while contract Yuanyue 01 is weak due to the suppression of new production capacity and sufficient accumulation time.

The staple fiber market is facing a similar situation. On the one hand, the overall demand side is weak; on the other hand, staple fiber supply is expected to increase due to plant restart and new production capacity.

Although Jiangsu Desai 100000 tons and Fujian Jingwei 200000 tons units are scheduled to be overhauled, Huzhou Zhonglei of xinfengming is expected to be put into operation in early August, and another 300000 tons of xinfengming Xinyi new material plant is expected to be put into operation in mid August, with a total new capacity of 375000 tons. "Coupled with the restart of some units and load lifting, staple fiber production will increase."

Therefore, the domestic staple fiber industry is in a loose state of increasing supply and weakening. Due to the high price of crude oil, the price difference between primary and renewable fiber is at a high level, and recycled staple fiber begins to occupy the original market share. Due to the continuous weak demand of the downstream yarn factories, the cash flow is greatly compressed. In the context of the industry downturn, the factory uses more recycled staple fibers to reduce costs. Due to the large volume of recycled staple fiber, the original demand market is facing continuous challenges. However, the demand in the fourth quarter is still not optimistic under the expectation of weak domestic demand and weak external demand. Therefore, the near end with relatively strong staple fiber may be weakened by the abundant liquidity brought by the accumulation of inventory.

From the perspective of medium and low-end orders of the textile association, it is expected that the demand of the textile industry will gradually change into the lower ten days of the peak season. This indicates that the start-up and fulfillment of demand in late peak season may become the key to get rid of the weak position of textile raw materials.