Apparel / Textiles & Accessories

Recently, the China Chamber of Commerce for Import and Export of Textiles announced data that in the first five months of this year, my country's home textile exports recovered in an all-round way, the export scale hit a record high, and the exports of major provinces and cities achieved substantial growth.

The demand in the international home textile market continues to be strong, and exports of our home textile products to major international markets continue to grow, among which exports to the US market have the highest growth rate. From January to May, our country’s textile product exports amounted to US$12.62 billion, an increase of 60.4% over the same period last year and an increase of 21.8% over the same period in 2019. The export scale hit a record high in the same period in the past five years. At the same time, the export of home textile products accounted for 11.2% of the total export of textile and apparel products, which was 43 percentage points higher than the growth rate of the overall export of textiles and apparel, effectively stimulating the recovery of the overall export growth of the industry.

Favorable temptation in the home textile market, this year, the number of new texturing machines has reached 1,500!

The texturing market, which is the main production raw material upstream of home textiles, has also ushered in a bright moment since last year. Texturing belongs to the downstream spinning part of the upstream polyester filament, and it is the direct downstream user of polyester filament POY. Last year, DTY's overall profit was relatively high. In addition, downstream users are more optimistic about the market outlook. This year, the growth rate of texturing machines will expand. As of July this year, it is estimated that the new number of texturing machines will include about 1,500 domestic and foreign brands. In the first half of the year, the start of terminal weaving was relatively stable. Compared with the start of March-April 2019, there was a difference of about 10% between the start of the higher one, and the domestic and foreign trade orders of the terminal gradually entered the stage of repair.

Polyester yarn sales will become normal after April, and there will be limited space for subsequent price reductions.

In the second quarter, the growth rate of looms and texturing remained high, but the new orders for domestic and foreign trade were still average, and there was no obvious growth beyond expectations. Although the pressure on grey cloth inventory has declined year-on-year, the pressure on the month-on-month basis has gradually picked up. Under the general order background, the terminal factories are generally willing to purchase polyester, and the raw material stocking days are only at a low level of 1-2 weeks, which leads to greater pressure on the polyester filament factory warehouse. Therefore, the sales strategy of the filament factory this year is pulsed. Reduce price promotions to shift inventory pressure. It is understood that in more than two months, staged promotions have gradually become the norm, from once every half a month at the beginning to once a week. However, due to the poor performance of demand, the focus of the market and the results of sales promotion have gradually declined. Compared with the level in April, the center of gravity of the POY 150D/48F market in June has fallen by more than 200 yuan/ton.

Foreign trade orders improved slightly in late June, and attention was paid to follow-up improvements. The polyester operating rate is still operating at an average of over 91%, which is at a high level year-on-year. The filament operating rate remained at a high level year-on-year. With the shrinking of filament profits, there is limited room for subsequent price cuts and promotions. Therefore, the filament operating rate may be compressed in the long-term.

The contradiction between the supply and demand of polyester filament in the second half of the year is prominent, and the peak season may not continue the explosive growth of last year

According to data, the new production capacity of polyester filament is expected to be 3.55 million tons in the second half of the year. The new production capacity is mainly concentrated in Jiangsu and Zhejiang. In addition, Korla in Xinjiang and Weifang in Shandong have polyester filament projects, and the new production capacity is 800,000 tons in the first half of the year. In August last year, a set of 600,000 tons of Hengke plant was put into production, and the filaments were produced in April this year. In general, the new production capacity of polyester filament is expected to be 4.95 million tons in 2021, a year-on-year increase of more than 13%. The growth rate is 7%-8%, which is not as fast as the production capacity growth rate. Therefore, the contradiction between the supply and demand of polyester filament in the second half of the year is still prominent.

In the past years, the demand for polyester filaments picked up during the "Golden Nine and Silver Ten" period. Although the epidemic lasted throughout last year, polyester filaments ushered in a big rebound in late September and October, and terminal demand broke out. Downstream users purchased large quantities of polyester filaments, which pushed up the price of polyester filaments. . However, unlike last year, the downstream texturing and weaving enterprises are generally willing to purchase polyester this year, and the raw material stocking days are only at a low level of 1-2 weeks. Since May, downstream users have started the purchase of autumn and winter orders in advance. Overdraft in advance, and the overseas epidemic situation has not been effectively controlled with the vaccination. The current overseas epidemic situation seems to have a counterattack trend, and the polyester filament terminal field is mostly used in textiles and clothing, and the export proportion is large. Therefore, the overseas epidemic situation affects the textile and clothing industry. The export situation, in addition to trade disputes, increased shipping costs, tight container supply, and many other issues hindered the export of textiles and garments. The overall export situation of textiles is currently good, and the value of garment exports is declining. On the whole, in view of the activities of major e-commerce platforms in September-October, the increase in demand has been promoted to a certain extent. However, the peak season may not be able to continue the explosive growth trend of last year's demand. In the third quarter, the inventory of polyester filaments may decline slightly, if not Supported by other unexpected events, the inventory will gradually increase in the fourth quarter.

Under the influence of the epidemic, the price of polyester filament repeatedly bottomed out last year and fell to a historical low. At the end of the year, the price continued to be repaired with the help of costs. However, there is no obvious trend of recovery in terminal demand. Since the second quarter, the price of polyester filament has continued to promote the volume and transactions. The center of gravity continues to drop and has now reached a relatively low point. At the end of June, the effect of corporate de-stocking is obvious. It is expected that polyester filaments will stand in a stalemate in the second half of the year, then rise first and then decline. The high-end price appears in October and the low-end appears at the end of December.