Apparel / Textiles & Accessories

Under the influence of the continuous expansion of domestic polyester filament production capacity, exports have become another major demand area for domestic polyester filaments, and due to the low base effect, the export volume of polyester filaments in the first half of this year has increased significantly compared with the same period last year. According to customs statistics, in the first half of 2021, domestic polyester filament exports totaled 1.6324 million tons, a sharp increase of 44.57% over the same period last year, and an increase of 3.20% compared with the second half of 2020. Judging from the month-by-month year-on-year data, the overall increase range is between 10.68%-99.07%, and the increase rate is relatively obvious.

India imports a large number of polyester filaments:

The "quick-effect heart-relief pill" of polyester factories and the hidden worries of textile enterprises

Simply judging from the surge in exports of polyester filaments, in recent years, the actual profit of China’s polyester industry chain has shown a trend of picking up during the decline in oil prices. The polyester industry itself is already facing a serious oversupply situation. The profit recovery brought about by cost reduction may increase the start of the industry to a certain extent, and at the same time stimulate the launch of new production capacity. In recent years, the domestic polyester industry will also have a large-scale production plan. It can be seen that the contradiction between supply and demand in the market is facing further aggravation. Export is a major digestion channel for China's polyester, and the industry still places high expectations on it, and it is one of the solutions that many polyester manufacturers will consider.

What cannot be ignored is that from the perspective of major exporting countries, India's export volume has increased significantly. The outbreak of the new crown epidemic in India in the first half of the year has significantly affected the production of local polyester raw materials and polyester fibers in India, dragging down local production capacity. As the world’s largest producer of polyester filaments, China’s procurement of polyester filaments has become India’s best option. We can see that domestic exports to India in the first half of the year exceeded 200,000 tons, accounting for total exports. More than 13% of the amount. However, at the same time, it can be seen from the signs of a significant increase in polyester yarn exports that the demand for raw materials in many countries such as India has begun to recover, and the current international situation is bound to affect the domestic textile and apparel order demand. The risk of order reversal is worthy of downstream textile and apparel personnel. Think ahead.

The surge in exports can hardly offset the contradiction between supply and demand!

Bad signal: Weaving is more willing to release inventory than to develop new products

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, an increase of more than 13% year-on-year, and the terminal consumption is expected to be for the whole year The growth rate is 7%-8%, which is not as fast as the expected growth rate of production capacity. Therefore, the contradiction between the supply and demand of polyester filament is still prominent under the rebound of export volume.

In the past years, the demand for polyester filaments recovered during the "Golden Nine and Silver Ten" period. Although the epidemic lasted throughout last year, polyester filaments ushered in a big rebound in the end of September and October, with the outbreak of terminal demand and large purchases by downstream users, which pushed up the price of polyester filaments. . However, unlike last year, downstream texturing and weaving enterprises are generally willing to purchase polyester this year, and the operating rate of some warp knitting and circular knitting machines is still decreasing to varying degrees. The inventory of finished grey fabrics is at a historical high, especially the textile raw material spandex. Prices have risen sharply and goods are in short supply. Negotiations between buyers and sellers have slowed down or even stalled. Weaving companies have meagre profits. The willingness to release inventories is stronger than to develop new products. The stocking days of raw materials are only at a low level of 1-2 weeks. At the same time, downstream users have opened up ahead of schedule since May. The purchase of autumn and winter orders requires overdraft in advance, and the overseas epidemic has not been effectively controlled with the vaccination. The current overseas epidemic seems to have a counterattack trend, and the polyester filament terminal field is mostly used in textiles and clothing, and the export proportion is relatively large. Therefore, the overseas epidemic has affected the export of textile and clothing. In addition, many issues such as trade disputes, increased shipping costs, and tight container supply have hindered the export of textile and clothing.

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.