The price of textile raw materials has been rising, what is the market situation under the whole chain of rising industry?

Since the second half of last year, affected by factors such as capacity cuts and international tensions, raw material prices have risen sharply. After the Spring Festival, "price increases" soared again, by more than 50% ...... upstream "price increases" pressure to the downstream industry conduction, resulting in different degrees of impact. Cotton, cotton yarn, polyester staple fiber and other raw materials in the textile industry, the offer rose sharply. Prices are like on a vertical ladder. The entire textile trade was flooded with news of price hikes. We believe that the pressure of rising prices of cotton, cotton yarn, polyester cotton yarn, etc. is likely to be shared by all parties, including cloth mills, garment companies (or foreign trade companies), and buyers (including foreign brand companies and retailers). A significant price increase in a single link can not be solved, the terminal parties need to make concessions. According to the industry chain up, middle and downstream many people analysis, the current round of various types of raw material prices rose faster and lasted longer. Some of the sharp rise in raw materials is even "time-sensitive", reaching a high frequency of price adjustments in the morning and afternoon. The various types of raw materials are expected to be the systemic price increases in the industry chain, the supply of upstream raw materials, high prices, and may last for some time.

Spandex prices rose by nearly 80%

Spandex prices continued to rise after the long Spring Festival holiday. According to the latest price monitoring information, the latest price on February 22, 55,000 yuan / ton to 57,000 yuan / ton, the price of spandex this month rose nearly 30%, relative to the low price in August 2020, spandex prices rose nearly 80%. According to the analysis of relevant experts, the price of spandex began to rise in August last year, mainly due to the massive increase in downstream demand, the general low inventory of producers and the lack of product supply. In addition, the price of PTMEG, the raw material for spandex production, also rose sharply after the Spring Festival. The current price per ton has exceeded 26,000 yuan, which has stimulated the rise of spandex prices to a certain extent. Spandex is a highly elastic fiber with high elongation and good anti-fatigue properties. It is widely used in textiles and apparel. In the second half of this year, a large number of overseas textile orders shifted to China, constituting a huge boost to the domestic spandex industry. The strong demand has driven this round of spandex price spikes.

At present, spandex companies have started construction under high load, but the short-term supply of spandex products is still difficult to ease. Some of China's leading spandex companies are preparing to build new capacity, but these new capacities will not start in the near term. Construction will start around the end of 2021. Experts said that in addition to supply and demand, the rising prices of upstream raw materials have contributed to a certain extent to the rise in spandex prices. The direct raw material of spandex is PTMEG. since February, the price has increased by about 20%. The latest offer reached 26,000 yuan per ton. This is a chain reaction formed by the price increase of upstream BDO. on Feb. 23, the latest offer of Dehau was 26,000 yuan. / ton, 10.64% higher than the previous day. Affected by this, the prices of PTMEG and spandex could not be stopped.

Cotton prices rose by 20.27%

As of Feb. 25, the domestic 3218B price was 16,558 yuan per ton, up 446 yuan in just five days. The recent rapid rise in prices is due to the improving macro market environment. Downstream demand has been boosted by a rise in U.S. cotton prices as economic stimulus is expected to rebound after the U.S. epidemic is under control. U.S. cotton prices continued to rise as global cotton demand recovered due to positive supply and demand reports in February and U.S. cotton export sales remained strong. On the other hand, textile companies started operations earlier this year and another round of restocking after the Chinese New Year led to accelerated demand for orders. At the same time, prices of polyester staple fiber, nylon, spandex and many other textile raw materials rose in the domestic market, which also led to higher cotton prices. Internationally, U.S. cotton production is set to fall sharply in 2020/21. According to the latest report from the U.S. Department of Agriculture, U.S. cotton production this year decreased by nearly 1.08 million tons from the previous year to 3.256 million tons. The USDA Outlook Forum in 2021/22 significantly increased global cotton consumption and total production, and also significantly reduced global cotton balances. Among them, the demand for cotton in major textile countries such as China and India rose again. The U.S. Department of Agriculture will announce official cotton acreage on March 31. Brazil's cotton planting progress is lagging behind and production forecasts have been revised downward. India's cotton production is forecast at 28.5 million bales, down 500,000 bales, China's 27.5 million bales, down 1.5 million bales, Pakistan's 5.8 million bales, up 1.3 million bales, and West Africa's 5.3 million bales, up 500,000 bales.

In futures, ICE cotton futures rose to the highest level in more than two and a half years. Continued improvement in demand, competition for grain and cotton land, and optimism in external markets continued to spark speculation. on Feb. 25, Zheng Mian's main(CFM) contract 2105 broke through a high of 17,000 yuan per ton. The domestic cotton market is in a gradual recovery phase, with little enthusiasm for downstream closing. The main reason is that cotton resources offer rose sharply and yarn companies themselves have pre-holiday reserves. It is expected that after the Lantern Festival, market transactions will gradually return to normal. since mid-February, cotton yarns in Jiangsu, Henan and Shandong are all growing at the level of 500-1000 yuan/ton, and high combed and combed cotton yarns of 50 and above are generally growing at the level of 1000-1300 yuan/ton. At present, domestic cotton textile mills, fabric and garment enterprises have resumed work to 80-90%, a few spinning mills have begun to cotton, polyester staple fiber and other raw materials for inquiry and purchase. With the arrival of domestic and international trade orders in March - April, there are still some contracts that need to be rushed before the holidays. Supported by external markets and fundamentals, ICE resonated with Zheng Mian. Downstream weaving fabric companies and garment factories are expected to purchase in late February to early March. Quotations for cotton and polyester-cotton yarn rose sharply. Downstream terminals need to accelerate the pressure of cost growth.

Business analysts believe that domestic cotton prices have been rising on the back of multiple positive developments. With the arrival of the peak season of the domestic textile industry, the market is generally optimistic about the market outlook, but should also be wary of the impact of the new crown and the pressure of the market to catch up with the enthusiasm.


Post time: May-24-2021