Outlook For Textile Industry Bottomed Out In The First Quarter Of 2012

The economy weakened in the second half of 2011.

In 2012, downstream orders have gradually picked up. The textile industry is expected to rise after the lunar new year, but the profit growth is estimated to be limited.

European debt crisis and tighter credit in China, textile industry in the second half of this year fell flat, the price fell, and in the fourth quarter, upstream chemical fiber raw materials tumbled, midstream processing silk products and other quotes increased.

In the first quarter of this year, the international cotton price was 150 cents per pound. After the best single season profit in recent years, the cotton growers in the United States increased by 25%.

The US Department of agriculture predicts that the world's cotton output will reach 123 million bales (480 pounds / pack) from 2011 to 2012, increasing by 7.7% annually, but the global demand for the same period will be revised to 111 million packs from the original estimate of 116 million bags. This reflects the slowdown in US Europe and China's demand, and the global cotton supply will exceed the demand 10.9%, and the supply and demand situation will be reversed.

In the price segment, from late autumn to early next year for the cotton harvest season, the short-term oversupply will be more serious, and the recent cotton price will drop to 86 cents from 100 cents per pound. It is expected that the supply and demand adjustment will last for half a year. It is estimated that the international cotton price will be between 80 and 95 cents per pound in the first half of 2012.

The price of cotton is down, and the processing silk population with substitution effect is also difficult to raise the price. In addition, the new production capacity of polyester raw material, PTA, has gradually opened in China, making the utilization rate of global PTA capacity decline all the way since the peak of 2011, and the supply and demand situation has been changing year by year.

Because the Chinese government has limited the production capacity of PTA upstream material to xylene (PX), and the supply is relatively tight, it will also constrain the spread of PTA plant. The recent sluggish demand and the continued decline in quoted prices are expected to drive the quotation back up in 2012 after the lunar new year, but the long-term utilization of capacity will go down, and the spread of polyester population will be relatively depressed.

Looking forward to 2012, downstream orders have gradually picked up, and the textile industry boom is expected to bottom out after the lunar new year.