Economic Analysis of the Filament Weaving Industry in the First Half of 2011 (Part 2)

(2) Synthetic boom index of synthetic fabrics : The following figure shows the comparison of synthetic index of chemical fiber products in the first half of 2011 and the first half of 2010.

It can be seen that although the market sentiment index has declined slightly since May, it is still higher than the level of the same period of last year. With the arrival of the peak season, downstream demand has begun to gradually release, and sales of filament fabrics are improving. The sales volume of various types of apparel fabrics in the market is gradually increasing, especially in autumn and winter, the order quantity of apparel fabrics is greater; with the change of weather, The home improvement market is picking up, and the market sales of decorative fabrics, curtain fabrics and other products have also rapidly increased.

4, the raw material market is basically stable

In the first half of 2011, global cotton prices have fallen sharply from the highest price level in history, causing market tensions. Both buyers and sellers take a wait-and-see attitude. On the contrary, chemical fiber filaments have performed relatively smoothly. Taking polyester filament DTY75D/36F as an example, the price has basically stabilized between 18,500-19,000 yuan/ton after a slight decline from the beginning of the year and dropped slightly to 18,000 yuan/ton in late May; the price of FDY50D/24F is after mid-March. It began to slide all the way to the bottom of the valley in mid-May and started to pick up in early June. Overall, the stability of raw material prices has, to a certain extent, eased the pressure brought about by the increase in business costs and labor costs.

Despite this, prices of PTA and ethylene glycol rose by more than 35% compared to the same period last year, resulting in a 30% increase in the price of polyester filament (DTY). The rise in raw material prices has increased production costs and the pressure on corporate profits has increased rapidly.

5. Problems (1) Poor living environment and difficulties for small businesses

The large number of small and medium-sized enterprises in the filament weaving industry faced issues such as raw material price transfer, labor, **, and energy saving and emission reduction, which made the company appear to be incapable of doing things and making life difficult. Since small enterprises generally have low debt, some companies may lose money, but there will not be a large area of ​​collapse.

(2) Increasing labor costs

Since last year, despite the general increase in wages by 30%-40% in various enterprises, there has been tension in employment. Rising labor costs and labor shortages are plaguing businesses.

(3) The problem of power consumption is more prominent

In the summer, the tension in electricity consumption becomes even more pronounced. Local electricity restriction measures have a direct impact on the production, sales, and supply capabilities of enterprises and, to a certain extent, increase the company's production costs.

6. Annual forecast

Judging from the current situation, it is expected that China's filament yarn weaving industry will continue its economic operation in the first half of the year and will be relatively stable. Filament fabric production can achieve growth of more than 10% year-on-year, and export volume can exceed 9 billion meters.