PFY market remains soft after end-user market cooled down – ChinaTexnet.com
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PFY market remains soft after end-user market cooled down

2020-11-24 09:28:52 CCFGroup

Sales of grey fabric weakened apparently in recent period. Overall textile downstream market has cooled down. Sales of water-jet grey fabrics for luggage and apparels have obviously diminished in Wujiang and Siyang and the sales volume of conventional fabrics was only 30-40% in some plants. Sales of previously hot warp-knitting super-soft spandex fabrics have come to an end in Haining. Price and profit both diminished greatly, and some plants have shifted to produce other products. Some circular knitting plants saw prominently decreasing business in Shaoxing, and the run rate has reduced rapidly. Business of warp knitting fabrics for velvet also cooled down in Changshu, with apparently falling sales volume. Sales of water-jet fabric were moderate in Changxing.



With diminishing business, grey fabric plants saw falling sales and squeezing profit. Price of knitted descriptions that saw big increment earlier and sound profit decreased more apparently. Price of earlier hot super-soft spandex fabrics declined to 11-11.5yuan/kg from earlier peak 14.5-5yuan/kg during this period in Haining, down to the level in early-Oct. With greatly dropping profit (from 4000yuan/mt to cost line), enterprises successively turned to produce other products.

Stocks of grey fabric accumulated again but the absolute level remained low. Therefore, the reduction of operating rate was slow but downstream run rate is expected to accelerate falling from end-Nov. On one hand, winter orders for 2020 have almost came to an end. Some end-users are preparing to hoard up some winter fabrics for 2021 as overseas demand is expected to recover after the vaccine came to the market. On the other hand, orders for fabrics for spring and summer clothing are scarce. Taking silk-like fabrics as an example, Nov is supposed to a replenishment season by convention. However, players think the popularization of vaccine will take time even after it came to the market and the Covid-19 is unlikely to disappear in spring of 2021. Therefore, the procurement of spring and summer fabrics is cautious temporarily. Current orders are scant and later orders in Dec and Jan should be noted further.

Downstream buyers showed lower buying interest when new orders weakened recently and mainly consumed feedstock purchased before. Polyester fiber plants focused on selling and cut price to promote sales by virtue of rising crude oil. However, the effect of promotion marginally decreased. Price of PFY kept falling and price competition emerged. In short run, price of PFY may keep inching down and downstream buyers are likely to have impulse-type procurement.

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