I. General situation of Russian and Ukrainian textile industry
1. Overview of Russian textile industry
Due to the Soviet Union's emphasis on heavy industry, the development of light industry was not paid enough attention, and the textile and garment industry was mainly concentrated in Belarus and the Baltic States. After the collapse of the Soviet Union, the overall output of Russia's textile and garment industry declined by more than 10 times.
(1) Supply and demand of textile and garment raw materials
Russia imports most of its raw cotton (cotton fiber), mostly from Uzbekistan or Azerbaijan. Russia's cotton imports totaled 487 million in 2020.
Russia's raw material supply situation is more ideal hemp and chemical fiber. Linen is one of Russia's oldest industries, but production and processing has been difficult for years. Jute and sisal for the rope were imported from India and Bombay.
Russia's chemical fibre production is growing at 5-6 per cent a year and total consumption is growing at 11-12 per cent a year. Thus, the share of imports remains high, at least 60 per cent. The main importers are Belarus, China, South Korea and India.
(2) Supply and demand of textile and garment semi-finished products in Russia
Russian textile and garment semi-finished products are mainly imported from Asian countries, especially China and India, where cotton fabric and yarn products are low-cost. Then there is Turkey, which has its textile industry as its pillar industry.
Russia is an important export market for China's textiles and clothing, as well as an important region for China to implement export market diversification and "go global" strategy. According to Chinese statistics, due to the impact of the epidemic, bilateral trade reached US 107.7 billion in 2020, down by 2.9 percent year-on-year and exceeding US 100 billion for three consecutive years. China's share in Russia's foreign trade has further increased, and China has remained Russia's largest trading partner for 11 consecutive years. From 2000 to 2020, China's textile and garment exports to Russia increased from 1.11 billion US dollars to 7.65 billion US dollars in 2020, a cumulative increase of nearly six times.
2. General situation of Ukrainian textile industry
Ukraine, with a population of more than 40 million, is the fabric distribution center of Central and Eastern Europe and has the largest physical fabric market in Eastern Europe.
From the perspective of trade, Ukraine is dominated by female consumers, with many niche designer brands and strong domestic demand. Ukraine also exports clothing to eu countries and Canada (duty-free), and exports to Russia through grey channels are also duty-free. The bulk of Ukraine's fabric comes from China and Turkey, with logistics passing through the Suez Canal to the Black Sea port of Odessa via Turkey.
From the industrial point of view, Ukraine is an old-line garment processing country left from the Soviet Union. Up to now, it still retains a large number of small and medium-sized garment enterprises with relatively cheap labor force and rich technical reserves. Export to Canada, Europe, The United States and Russia has duty-free agreements.
In 2019, 2020 and 2021, China's textile and garment exports to Ukraine were 6.8 million US dollars, 660 million US dollars and 760 million US dollars respectively, accounting for about 35-40 percent of Ukraine's imports. China is the largest source of textile and garment imports from Ukraine, while Ukraine's textile and garment exports are relatively small, with annual exports of about 400 million US dollars in recent years. Germany, Denmark and Italy are the main markets for Uzbekistan's textile and garment exports.
The influence of the situation between Russia and Ukraine on the textile industry
1. Raw materials are soaring
According to the Ministry of Industry and Information Technology, of more than 130 key basic chemical materials, 32 percent of them are still blank and 52 percent are still dependent on imports. Such as high-end electronic chemicals, high-end functional materials, high-end polyolefin, aromatic hydrocarbons, chemical fibers, etc., and the above products and industrial chain subdivided raw materials are mostly basic bulk chemical raw materials.
It is not difficult to see that China's more than 30 kinds of chemicals mainly imported from abroad, part of the degree of dependence is greater, such as adionitrile, adienediamine, high-end titanium dioxide, silicone and other high-end monopoly products. Since the beginning of the year, the price trend of these products gradually skyrocketed, the highest price increased by 8,200 yuan/ton, up nearly 30 percent .
The international oil price broke the 100 yuan mark
Oil prices rose sharply last Monday, with New York crude futures up 2.90 percent to 92.83 / BBL, as tensions between Russia and Ukraine triggered supply concerns. Brent crude futures rose 3.90 percent to 97.19 / BBL for the first time in September 2014, or more than seven years. International gold prices were little changed on the day. In recent days, brent and WTI crude futures have both breached 100 a barrel, setting new highs.
Price rises are flying around
PP/PE industry chain
Japan Polyethylene Corporation: since March 15, all PE products increased by 23 yen /kg, about 1263 yuan/ton.
Polypropylene Co., LTD. : Effective March 1, all PP products will be increased by 25 yen /kg, or about 1373 yuan/ton.
PA6 / PA66 / PBT, industrial chain
Basf has raised the prices of eight TPU products of its Elastollan® series in the Asia-pacific region by up to RMB3,167. The price of Ultramid® series high-performance materials in the Asia-pacific region was raised by 300 USD/ton for non-flame retardant PA66, PA6 and PBT products; Flame retardant grade PA66, PA6, PBT products increased by usd 800 / ton.
DSM: increase the price of the following engineering materials globally. The price of AKulon PA6 / PA66 products in the Asia Pacific region will be increased by RMB 1875 / ton. Arnitel series OF TPC products increased by 2250 yuan/ton; EcopaXX series OF PA410 products increased by 4500 yuan/ton; ForTii series of PA4T\PPA products up 4500 yuan/ton; Stanyl series OF PA46 products increased by 3000 yuan/ton.
Dupont: the price of PA, PBT, POM, TPC and other products will be raised by up to 8880 yuan/ton. Increase the price of PBT, PET, PA, TPU and other polymer products in North America, up to 8270 yuan/ton.
The outbreak coincides with an escalating geopolitical conflict and a major change in the situation in eastern Ukraine, which has affected the supply of crude oil and natural gas overseas.
According to past experience, crude oil market rises, polyester polyester market will follow! Because crude oil is one of the most important raw materials in polyester and polyester industry, the rise and fall of oil price will directly affect the overall profitability of polyester and polyester industry. Affected by the 24 crude oil price surge, PTA, ethylene glycol futures rose again, ethylene glycol closed up more than 100 points, or more than 2 percent , PTA closed up nearly 300 yuan, or 5.31 percent .
From the near stage, Russia and Ukraine crisis affects the market nerves, crude oil stage rising momentum has been irreversible, weak supply and strong pattern is still continuing, the market bullish sentiment is not reduced, the short term will have strong support for polyester prices, driving the market shipment speed will also accelerate.
Affected by the conflict between Russia and Ukraine, the supply and demand of crude oil is tight, and the price will continue to fluctuate and rise. The market believes that polyester staple fiber will also fluctuate with the price of crude oil, and enterprises can replenish stocks appropriately at low prices. As raw materials rise, downstream polyester yarn or will usher in a wave of rising.
source:https://www.tnc.com.cn/info/c-001001-d-3719574.html