Analysis of the Operation of Textile Materials in the Domestic Market in the Second Week of August - 3

This week, for chemical fiber raw materials, the PTA industry continued to operate at high capacity due to sustained profitability. This has led to a growing oversupply in the spot market. Although PTA manufacturers saw a decline in profits since late June, they are still earning around 1,173 yuan per ton, which remains strong. The high profit margins have driven production facilities to maintain high operating rates, resulting in significant stockpiles in the market. This surplus has added downward pressure on PTA prices, making it difficult for them to rise further. On the downstream side, this week, rising temperatures have prompted stricter power rationing measures in Jiangsu and Zhejiang provinces. As a result, weaving companies in these regions have seen their operating rates drop significantly, affecting the local polyester filament market. Inventories of FDY, DTY, and POY have started to accumulate. In the Shengze area, loom operating rates have fallen from 70% to 65%, while the overall operating rate of knitting and weaving enterprises in Shaoxing remains low at around 50%. Meanwhile, in Haining, knitting machines continue to run at full capacity, but order volumes have weakened compared to previous periods. Some warp knitting companies reported a decline in leather fabric orders from Wenzhou after September. The POY market is currently underperforming, with poor production and sales conditions. Market sentiment is weak, and trading activity in the DTY sector has also slowed down. The impact of electricity restrictions in Shengze and surrounding areas has caused a sharp drop in operating rates. With weak demand from downstream sectors, transaction volumes have dropped significantly. Based on current market trends, it is expected that prices for polyester filament in the downstream market will experience a slight decline. Recently, the Shengze silk product price index has fallen. Several factors contribute to this trend: 1. India's share in China’s silk exports has dropped sharply. While India remains the largest export market for Chinese silk products, its market share has decreased from 47.63% and 49.46% last year to 39.88% and 45.06% this year. 2. The domestic textile and apparel market has faced sluggish growth due to macroeconomic cooling. Demand risks are increasing, and domestic economic demand is showing signs of fatigue. At the same time, the external export environment remains uncertain. As silk prices continue to rise, there is little support for sustained growth. It is likely that late silk will consolidate around 300,000 yuan. In summary, when both domestic and international consumption environments are not booming, tussah silk prices are unlikely to remain high. This year, most transcripts are hovering around 270,000 or even lower. Currently, silk reeling factories have eased the pressure from overproduction. The support for further price increases is clearly insufficient. Whether the market moves up or down, higher prices bring greater risks. Preparing for potential volatility is a wise strategy.