The Turning Point Of Chemical Fiber Industry Shows That The Profit Margins Of Listed Companies Are Narrowed.

After a sustained sharp adjustment, the market has recently entered a stage of panic falling again, even if the policy gains have not been able to block down the fall, the stock presents a comprehensive general fall pattern, in particular, some of the first quarter earnings pre reduction of the stock decline is more huge.

Due to the deterioration of the market environment, the performance of the chemical fiber industry has declined as a whole.

On Tuesday, the two cities had a double dip in the market, but the Hubei gold ring and Xinxiang chemical fiber in the chemical fiber plate were reported on the same day as the first quarter loss and pre reduction announcement. Other varieties such as Shandong Hailong, Shu Ka shares and Ao Yang technology also declined.

Downward turning point appears

In the past 2007, it was a rare opportunity for enterprises producing viscose, spandex and other textile raw materials.

The market price of viscose and spandex has seen a trend of continuous rise for many years. The performance of related listed companies, such as Huafeng spandex and Shandong Hailong, has seen a sharp growth and become a star in the market.

However, since the beginning of 2008, prices of viscose, spandex and other related products have dropped significantly.

Viscose staple fiber has fallen below 20 thousand yuan at the end of March, and the price of viscose filament and spandex also showed a sharp downward trend.

Although the price of polyester has rebounded recently, it has not changed the downward trend.

Affected by this, the relevant listed companies have issued a notice of pre tax deduction, and the share price has dropped sharply, thus becoming a serious disaster area in the adjustment of the market.

The performance of chemical fiber industry can be confirmed.

Narrowing of profit space

Xinxiang chemical fiber in yesterday's performance pre cut notice, the decline in performance is due to the first quarter of 2008, the production of major raw materials prices generally rose, the price of products decreased considerably, quite representative.

Oil prices continue to rise, as raw materials for the chemical fiber industry has increased significantly, such as Hubei gold ring, compared with the same period last year, the main raw materials short linen, sulfuric acid, carbon disulfide price increase is currently 86%, 496%, 145%, due to the rising prices of major raw materials, leading to the production cost of chemical fiber leading products increased significantly.

Ao Yang technology performance forecast also shows that the first quarter of this year's performance will decline 50% to 80% year-on-year one of the reasons is that the main raw materials pulp prices rose a large year-on-year increase, coupled with the price of chemical excipients substantially increased, resulting in viscose staple fiber costs rose more than the price rise.

As a fully competitive industry, the price rise of upstream products is difficult to smoothly pform downstream, and the continuous increase of labor costs has also increased the burden on enterprises.

Sales price is hard to rise

Influenced by the subprime mortgage crisis in the United States, the demand for overseas markets has obviously weakened, which has a great impact on China's textile exports. At the same time, because of the continued appreciation of the renminbi, the impact of exchange rate risk on textile enterprises is becoming more and more serious, which has weakened the price advantage of China's textile exports, and the textile export situation is still not optimistic in a long period of time.

The reduction of demand has made the competition in the upstream chemical fiber industry become more and more serious. Especially in recent years, the production capacity of chemical fiber at home and abroad has been expanding continuously. Under the background of the lack of demand, excess capacity is nowhere to be released, and price reduction has become the only choice for enterprises.

Data show that, due to the reduction of orders in the domestic textile processing industry, especially in foreign trade orders, there are obvious signs of weakening in the downstream markets of spandex, and the increase in the new capacity of spandex further aggravates the contradiction between supply and demand in the market.

The industry generally believes that the market risk of spandex is still relatively large, spandex products still have room for decline.

Industry outlook is worrying

Under the influence of these factors, the chemical fiber industry is facing unprecedented difficulties. The overall weakness of the textile industry may just begin. After fully enjoying the huge profits brought by the continuous soaring of products in 2007, the investment risk of the listed companies began to release as the viscose and spandex fields began to show a downward turning point.

Although the domestic textile industry has begun to appeal to the government to "rescue the market", the government may also solve the problem through tax policy, so as to maintain the international competitiveness of textile and clothing products in the context of the continued appreciation of the renminbi. But in the long run, the textile industry will inevitably face internal worries and external damage, and the chemical fiber industry will also be damaged, so it is suggested that investors should avoid it.