PFY: Later Autumn Welcomes a “Chilly Winter Market”
Author: Nov 10, 2011 14:23
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168tex News: Looking back on PFY market condition at the same period last year, it can be said infinite prosperity, for its price increased day by day, hitting new peaks once after another. Today, however, the scene changes, its market condition is pretty bleak. Since November, most PFY products price has dipped over 1000CNY/t on average, and will continue its downward trend. Major poly yarn plants condition is also bleak, which is around 50%~60%, and some even around 30%~40%. The low price and low turn out makes the later autumn market even chill.
So, what’s the reason on earth that caused such a sharp up and down change to the PFY market? We think the reasons are as follows:
Firstly, influence by the decline of the overall industry.
Since the beginning of the year, China’s textile and garment enterprises are universally bothered with labor shortage, electricity shortage, and money shortage. Under the back ground of increasing operation cost, manufacturing oriented enterprises are on the edge of bankruptcy. According to the customs data, from January to September, China’s garment and accessories exportation mounted to 115.23 billion US dollars, increasing by 23.3% year on year. But garment exportation was hardly increased. From January to August, the actual garment exportation quantity is 19.622 billion pieces, increasing by 1.8% year on year. From these data, we can find that the performance of the whole textile industry is not satisfying. Chemical fiber industry, as the subordinate industry is inevitably suffering the impact.
Secondly, the global economy is precarious.
The outlook report issued by the International Monetary Fund has greatly down regulated the global economy growth expectation. The U.S economy growth is 1.5%, far below the June expectant 2.5%; economy growth expectation next year has declined from 2.7% to 1.8%. Economy growth rate of the developed countries has also down regulated from 2.2% to 1.6%, and the next year’s growth rate has also been down regulated from 2.6% to 1.9%. Growth rate in the emerging and developing countries are also countering with the same situation. According to the report, IMF has forecasted the growth rate of the second half this year may reach 6.4%, and next year will reach 6.1%. Forecast in June is 6.6% and 6.4% respectively. IMF also forecasted that the economy growth rate this year of China will reach 9.58%, which is lower than 9.6% that expected in June. The next year’s forecast is 9.0%, which is also lower than 9.5% that expected in June. The precarious global economy has make the market lost power, and also caused heavy losses to all walks of life.
Thirdly, severe cotton price slump has brought about “nuclear radiation”.
Last year, cotton price jumped by large, from 15000CNY/t at the beginning of the year to 3000CNY/t, which not only broke through the record over the decade, and also hitting a new peak of the international market over the past 15 years. Cotton price jumped, the related products, like chemical fiber, also boosted up. But now, the cotton market is just like blown by a chilling autumn wind, overwhelming with worries. According to the statistics, the bottom price of cotton this year is in August, in comparing with the peak of 31000CNY in March, the draw amount is over 60%. Even with the support of the acquisition price, 19800CNY/t, comparing with the peak in March, the previous cotton price is also dropped by around 40%. The slumped cotton price downgraded the replacement of chemical fiber function, contributing a pressure to the chemical fiber yarn market.
Fourth, downstream weaving market is depressed; market confidence suffers a heavy toll.
See from the various factors, the key factor that influenced the market sources from the downstream demand and confidence. Under a series of unfavorable factors, like reduced orders, narrowed profit margin, piled up stock and etc, the market confidence is quite low. Moreover, now it is closing the spring festival, but the expected boom season has not come yet. Downstream expected value is more and more low. Moreover, the previous over accumulated inventory and debt default makes weaving plants suffer from a big financial difficulty. Many weaving plants have already lowered down operation rate, thus curbed the price of the upstream poly filament yarn.
Judging from various factors of the current market, polyester filament yarn has stepped into its winter phase and how to pass the winter is the key point of every polyester filament yarn plant.
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Editor: Candy From: 168Tex.com
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