Since the outbreak of the Russian-Ukrainian conflict in 2022, it has had a huge impact on my country's textile industry. On the one hand, after the withdrawal of European companies, China's textile exports to Russia have increased significantly. On the other hand, the Russian-Ukrainian conflict has threatened the global crude oil supply, causing large fluctuations in international oil prices. Some time ago, Russia and Ukraine finally began to renegotiate, which made people see the dawn of peace between Russia and Ukraine, but after a series of recent events, the war seems to continue.
According to CCTV News, Ukraine revealed that it launched a special operation against Russia on June 1, destroying 41 Russian strategic bombers with drones, and about 34% of the strategic bombers at major Russian airports were attacked. Russian media said that the Ukrainian statement was pure rumor. According to the Ukrainian report, Ukrainian drones penetrated more than 4,000 kilometers into Russian territory and attacked four strategic bomber bases of the Russian Aerospace Forces at the same time. If the news is true, then according to Russian military bloggers, the scale and impact of the attack can be compared to the "Russian Pearl Harbor Incident", and Russia's sharp escalation in the Ukrainian war may be imminent. Affected by this, Brent crude oil and WTI crude oil both soared by about 4%. In addition to crude oil, the spot price of gold, as a safe-haven asset, rose by more than 2.5%, and the spot price of silver rose by more than 4%, which shows the market's judgment on the situation.
Currently, polyester filament is in a production reduction cycle. A month ago, the leading polyester filament company announced that it would increase production cuts, and the second round of production cuts would increase by about 8%, and repair the prices of some loss-making filament varieties. Some polyester factories have begun to raise prices before the holiday. And due to the superposition of factors such as production cuts and promotions, the inventory pressure faced by leading polyester factories in the future will not be great. It was about this time last year. Before the off-season, polyester factories not only did not reduce prices, but instead began to sell silk at a "fixed price" contrary to their norm, and the price of polyester filament rose instead of falling. At this stage, the upstream crude oil price has risen sharply due to geopolitical factors. Polyester factories do have the confidence to raise prices without having to consider inventory, production and sales.
But on the other hand, the upstream polyester factories have the confidence to raise prices, but the downstream weaving enterprises no longer have the strength to "take over". In the first half of last year, the grey cloth market ushered in a rare hot market. Although weaving enterprises shouted low profits, after small profits and quick turnover, the inventory of grey cloth has been greatly reduced, and the funds on hand are also sufficient. Ambitious weaving enterprises are still updating equipment and expanding production capacity. But at this time this year, the profit is still as low as before. Some of the machines added before have become a burden. The inventory of grey cloth is weighing on a large amount of funds, and it is difficult to have spare money to buy high-priced raw materials. In addition, the production capacity has increased, but the US tariffs and restrictions on cross-border e-commerce in many places overseas have further suppressed the growth of foreign trade demand, making the supply and demand relationship further unbalanced and further compressing the profits of conventional grey cloth. Therefore, from a long-term perspective, it is unlikely that polyester factories will set off another round of "one price" market like last year.
