September is the traditional peak season for the textile industry, but the prices of crude oil, PX, PTA and other products have repeatedly hit new lows this year. Some people think that this is due to the lack of quality of this year's "Golden September", but is this really the case?
The signs of economic slowdown in the United States, the world's largest oil consumer, are becoming more and more obvious. Investors are pessimistic about the prospects for global oil demand growth, and international oil prices fell sharply last week. New York oil prices fell 7.99%, and Brent oil prices fell 9.82%. Among them, New York oil prices fell to a new low since June last year. Driven by oil prices, the decline in the PX-PTA market deepened; among them, PX and PTA fell by more than 6% in a week, and MEG fell by more than 4%, which can be said to be a huge decline. The price of polyester bottle chips continued to decline. Downstream large factories have successively replenished stocks at low prices and have locked in this year's supply in advance. The market is in a downward channel, and traders are becoming more cautious in replenishing stocks, basically back-to-back operations. The previous replenishment was continuously "trapped", and the mentality was frustrated. The local supply was tight, resulting in increased losses. The buying momentum in the industry was weak, and trading maintained just-needed replenishment. As of the close of September 6, the price of polyester bottle flakes in the East China market fell to 6,350 yuan/ton, a new low this year. But at the same time, polyester filament only fell by about 50 yuan/ton in a week, a drop of less than 1%. In the case of such a drop in the upstream, the performance is still relatively strong.
The traditional peak season of September is coming. Although demand is weaker than in previous years, the orders in the textile market are still gradually increasing. Textile raw materials such as cotton viscose filament are running steadily and warmly. The weaving start-up is slowly improving. The confidence of textile enterprises is recovering, but some small and medium-sized textile enterprises still have poor orders, and the conversion or production restriction continues. With the retreat of high temperature days, orders for autumn and winter are also continuously issued. In addition, there are many holidays such as National Day, New Year's Day and Spring Festival. Terminal consumption is also constantly increasing. The expectation of recovery in the textile market still exists, and the textile market is still expected. From the perspective of loom start-up, according to the sample data monitoring of Silk City Network, the current start-up rate of water jet and air jet weaving factories is 73.5%, an increase of 3% month-on-month from the beginning of August. A large number of weaving enterprises have begun to fully open looms, showing a relatively obvious recovery trend.
From the order point of view, according to Longzhong data statistics, as of September 5, the average number of days for terminal weaving orders was 14.09 days, an increase of 1.19 days from last week, and the performance was not bad.
Therefore, although the textile market has not seen "explosion of orders" since September, the number of basic orders that should be in the peak season still exists, and these orders that have been gradually restored also play a certain supporting role in the price of polyester filament. Of course, the greater reason for the recent strength of polyester filaments is the reversal of the industrial structure.
The past few years have been the peak period of production in my country's polyester industry. In terms of PX, in 2023, my country's PX production capacity will increase by 5.9 million tons/year to 42.06 million tons/year, an increase of 16.3% over the previous year. Since the peak of the new round of capacity expansion in 2019, the average annual capacity growth rate has reached 24.8%. In terms of PTA, according to Steel Union data, the effective domestic PTA capacity will increase from 47.09 million tons/year to 80.675 million tons/year from 2017 to 2023, with an average annual compound growth rate of about 9.39%. In 2024, it is expected that 9.5 million tons of production capacity will be put into use, and 4.5 million tons of new production capacity has been completed as planned in the first half of the year. In terms of polyester, according to Jinlianchuang data, the domestic polyester production capacity increased by 3.2 million tons from January to June 2024, a decrease of 26.61% compared with the same period in 2023. And the focus of new production capacity has shifted from polyester filament to polyester bottle flakes. Therefore, after entering 2024, the supply and demand situation in the upstream and downstream of the polyester industry chain has reversed. The strong PX in the past has become weak, while the relatively weak polyester filament in the past has become strong.
