Recently, coal prices have risen rapidly, hitting record highs. In order to curb the “coal super craze”, reduce the excessively high coal prices to a reasonable level as soon as possible, and return the coal market to rationality, the National Development and Reform Commission has launched a series of “combination punches” that are so powerful that they are rare. “Coal is super crazy” is no longer crazy! Thermal coal is no longer making great progress. Thermal coal futures fell by the limit for three consecutive trading days last week, with a cumulative decline of more than 30%. Affected by thermal coal, the prices of upstream chemical fiber raw materials PTA, ethylene glycol, polyester filament and other polyester products began to fall back. PTA continued to fall after rising last week, and the futures price dropped by 80 yuan/ton from October 15. Since the fourth quarter of 2021, the price of polyester filament has fluctuated and risen, far exceeding the price in the same period from 2019 to 2020, reaching a recent highest value in mid-October. But then it started to fall, and it is currently running in shock, and it seems that the rally is over. From the graph below, we can also see a downward trend, with raw material prices putting the brakes on rising prices, or returning to low prices.
At the end of October, news of the cancellation of rolling blackouts and power cuts spread like wildfire Many companies have also stated that they have not restricted production for many consecutive days. Therefore, market participants mostly interpret that power restrictions in Jiangsu will be lifted and normalcy will return.
In upstream After the decline in raw materials and the end of production restrictions, printing and dyeing factories continued to increase prices. Another wave of new price increase notices came overwhelmingly, with the highest price increases of 30%! Some manufacturers have even raised dyeing fees for the third or fourth time.
What is going on with this wave of operations in the printing and dyeing factory? Do you understand?
Loose upstream prices have a slow impact on the printing and dyeing industry
Although printing and dyeing is a very important link in the textile industry, connecting the entire upstream and downstream industries, as a downstream industry, the impact of the upstream on it is transmitted slowly. For example, PTA prices have loosened, but polyester filament yarn has not followed the decline. It has only stopped rising and maintained stable operation. However, most of the gray fabric prices of downstream weaving enterprises are relatively strong, so dyeing costs will be difficult to be affected in the short term.
Printing and dyeing factories are bursting out of stock, and they are confident enough to raise prices
Even if dyeing factories no longer limit production, increasing production capacity still requires a process, and the orders squeezed in the early stage are difficult to release quickly, so production restrictions will end in the short term It also failed to completely improve the congestion situation. Today’s printing and dyeing factories are severely out of stock. Gray fabrics are piled on the road, production is blocked, queues are queued for dyeing, and delivery times are as long as more than 20 days. In such a dyeing production situation, manufacturers still have full confidence and the capital to increase prices at will.
Dye prices have soared, and the cost side of dyeing fees is strong
However, the main reason for the repeated increases in dyeing fees is the rise in costs. Recently, dyes, steam, and natural gas have all experienced sharp surges. Due to pressure from the cost side, dyeing costs have increased sharply. The factory’s dyeing fees are also unknown. Take dispersed black ECT 300% as an example. On September 14, the price of dispersed black ECT300% rose to 27 yuan/kg, and has been raised frequently since then. On October 18, the price of dispersed black ECT 300% has risen to 42 yuan/kg. In just one month, dye prices increased by 55.56%. Due to the high cost, it is reasonable that dyeing fees have been raised several times.
However, whether this surge in dyeing costs can continue is of particular concern to textile professionals. Dating back to 2017 and 2018, due to production restrictions caused by emission restrictions, the textile market also experienced increases in gray fabric and dyeing costs. However, in 2019, due to overcapacity, the market dropped sharply, gray fabric and dyeing fees fell to the bottom, and the prosperous scene passed like a passing cloud. Today’s market is very much like 2017, and the worry is whether the same mistakes will happen again when production restrictions end. The fall in the market is very likely to lead to a price drop, but fortunately, dyeing factories do not sell at a loss like gray cloth. When the market drops, in order to seize more orders, dyeing factories often adopt large-volume preferential policies. The normal amount of discounts is not large and will not have a great impact on its profits. When the production capacity of printing and dyeing plants recovers and orders fall, the possibility of a correction in dyeing fees is very high. The market has fallen back and prices have fallen, which is the normal state of the textile market, and cloth bosses have long been relieved.
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