Rising Prices Of Dyes May Not Necessarily Indicate The Coming Of The Boom Cycle Of The Textile Industry.

< p > since the beginning of this year, the price of chemical products such as a href= "//www.sjfzxm.com/news/index_c.asp" > disperse dyes > /a > has risen in turn, coupled with the gradual stabilization and recovery of macroeconomic data and the renewed efforts of investment engines, the market is expected to have a strong counterattack against the cycle.

But the actual price of products is complicated, not every price rise is equal to the turning point of boom cycle.

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< p > to judge whether the price increase means that the inflection point of the big cycle has been established, we should have a basic judgement on the type of price increase.

Only a fundamental change in supply and demand pattern will lead to a real reversal of price movements.

One of the more common logics in this round of price increases is supply contraction and cliff collapse.

This feature is still possible in some industries which are considered seriously overvalued and lack investment value.

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< p > when analyzing the rising price of products, people often look for reasons from three aspects: cost push, demand pull and supply contraction.

What investors most like is the tension of demand pull and the consequent price increase. If the cost does not rise or even drop, the enterprise will enter the best profit state.

At present, the economic growth in the medium and long term is slowing down, and there is a large area of overcapacity. Therefore, we can only go back to the second place, namely, looking for the reverse of supply and demand pattern caused by supply contraction.

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< p > supply contraction is divided into two types: first, the stock cycle bottoms up, and the two is the excess capacity withdrawal.

The price increase caused by simple inventory changes can not be used as a basis for judging the coming of inflection point.

After all, after the price rises, excess capacity will be released. Once demand is not kept up, the inventory cycle will soon be switched from active replenishment to passive replenishment, and price increases will be suppressed.

Only by coming to the turning point of capacity will it mean that the market is really cleared, which will probably take several years.

As long as the price of the product can cover the variable cost, the enterprise will lack the willingness to stop production. It is difficult for the enterprise to withdraw from the enterprise.

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< p > as a typical cyclical industry, < a href= "//www.sjfzxm.com/news/" > dye auxiliaries > /a > many sub industries have overcapacity.

Since the beginning of this year, the upward trend of large cycles of production capacity has appeared in some industries.

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< p > of course, in view of the disappearance of "silent" capacity, the market will be discovered overnight. If investors are too conservative in their judgment, they may miss investment opportunities.

In the current situation, we may be more optimistic about the varieties that have been adjusted for several years and remain quiet.

First, the policy of overcoming overcapacity will be accelerated. The departments concerned are resolute and will definitely guard against new capacity. Two, building a "beautiful China" has become a social consensus. < a href= "//www.sjfzxm.com" > environmental protection policy < /a > tightening will lead to a significant improvement in the supply side of some highly polluting industries; three, it is not too pessimistic for demand, so long as the lower limit of economic growth can be maintained, the demand will be relatively stable, coupled with the upgrading of consumer demand, the demand side of some varieties may be strongly pulled.

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