Textile Market Review In 2019: Textile Industry Is Facing Severe Challenges Of Oversupply.

Textile market in 2019, 1-2 months by crude oil prices, cost end of the chemical fiber market has formed a strong support, and at the same time close to the Spring Festival actively stocking, cost driven and demand driven, the overall price upward. In the 3-5 month, the pressure of new capacity supply of chemical fiber raw material PX increased sharply, as well as the decline of export competitiveness, and the downstream orders weakened. Under the double pressure of cost and demand, the market began to fade. In June, chemical fiber installation increased due to accidental overhauls due to failure, and the spot supply was tight. In July, it was affected by the "PTA report letter incident" and the "PTA off site option explosion" incident. Meanwhile, demand side fatigue gradually appeared, and the market fell sharply. "Golden nine silver ten" traditional peak season impact, after a small rebound, constrained by PTA new input capacity again pressurized, demand side sluggish, raw material market is expected to exist, the market continues to bottom.

Throughout the 2019, especially in the second half of the year, the production of chemical fiber industry has been concentrated. However, the overall demand has not changed significantly, including the PTA industry chain, which is experiencing overcapacity and has been in a state of continuous inventory. The market will undergo a deep adjustment. It is difficult to change the pattern of supply exceeding demand in cotton spinning industry. In addition, the implementation of environmental protection policy and the instability of macro environment, it is expected that the textile industry will face a more severe test.

Figure 9:2019 textile index list

According to the price monitoring of the business community, in 2019, there were 1 kinds of commodities in the rise and fall of the commodity price list, the dry cocoon (6.47%). There were 16 kinds of commodities with a decrease of 5%, accounting for 94.1% of the total number of goods monitored. The top 3 products were viscose staple fiber (-29.82%), nylon POY (-22.39%) and polyester staple (-21.43%). The average annual increase was -14.76%.

Key ups and downs: viscose staple fiber, nylon POY, polyester staple fiber

Viscose staple fiber (-29.82%):2019 viscose staple fiber fell from the year to the end of the year, several times in the middle of a slight rise, but they are unable to weather, with an irresistible trend all the way down. The highest price in the whole year was 14000 yuan / ton in January 1st, and the lowest price was 9825 yuan / ton in the whole year. Viscose production declined in 2019, and import and export volume increased. About 180 thousand tons of capacity are withdrawn from the market, and 160 thousand tons of capacity have been shut down for a long time. Sai Lee acquired Jiangsu Xiangsheng and silya reorganized Australian ocean technology, coupled with the long-term impact of Sino US trade, leading to the end of 2019's weakness in viscose.

Nylon POY (-22.39%):2019 prices of textile raw materials generally declined, of which nylon POY ranked the highest in the annual decline of 22.39%. From mid April to the end of June, nylon prices showed a cliff type fall, with a drop of 17.08%. In 2019, domestic nylon fiber output (1-10 months) increased by 14.4% over the same period, and both imports and exports declined. The imbalance between supply and demand: domestic production capacity increases, and the trade pattern is not ideal, resulting in the shrinking of downstream digestibility. Cost reduction: the price of crude oil is weakening, and the production cost of the nylon industry chain has taken a whole step.

Polyester staple fiber (-21.43%):2019 polyester staple fiber lowest price in the whole year is 6860 yuan / ton at the end of November, the highest price in the whole year is 9153 yuan / ton in mid March, the average price is 8110 yuan / ton, the price fluctuates undulating, the typical goes higher and lower. The trend of upstream crude oil prices is closely related to geopolitics and supply and demand, and Sino US trade has reached an agreement. OPEC decided to deepen production reduction to bring benefits to oil prices. The restart and overhaul of PTA and PET plant are the key factors, weak demand and order, but recently, many sets of PTA devices have been relieved of inventory pressure. Based on the trend of 19 years, it is expected that polyester staple will continue to be the trend this year and will be more difficult next year.