Since the beginning of the year, the market situation has been tepid due to the reduction in global consumption power. Orders from weaving manufacturers can only be said to be average, and inventory accumulation continues.
For polyester filament, downstream demand is only supported by rigid purchases twice a month, which in turn drives up polyester production and sales. Neither increases nor promotions can stimulate weaving companies.
Even though market demand is difficult to recover, polyester equipment still maintains high-speed production. In 2023, the new domestic polyester production capacity has reached 7.65 million tons/year, far exceeding the same period in previous years. In the rest of the year, more than 3 million tons/year of new production capacity is planned to be put into operation, and the polyester industry may be put into production within the year to exceed 10 million tons.
Judging from the current market situation, the increase in the production of polyester equipment will undoubtedly give a heavy blow to the polyester market, which is only supported by the cost side. However, the polyester raw materials are ups and downs, and there is no obvious benefit for the weaving side.
Polyester yarn accounts for the majority of production
Judging from the production data in the past few years, the scale of production this year can be said to be quite large. Taking 2022, the year with the largest production scale, as an example, the total production volume for the whole year is only slightly more than 5 million tons.
However, the current production volume in 2023 has exceeded this number, which means that the scale of production in 2023 will set a new record. In just half a year, the production output in 2023 has exceeded the entire 2022.
(Source: Longzhong Information)
Specifically, the production of polyester filament has always occupied a major share. According to the data so far, the new polyester filament production capacity this year is 3.4 million tons/year, accounting for 44.44% of the total domestic polyester production.
At the same time, the new production capacity of polyester bottle flakes is 3.3 million tons/year, accounting for 43.14%. This shows a significant increase in bottle flake production capacity.
Polyester stocks will face crisis
This year, due to the adjustment of the purchasing strategy of weaving companies, social inventories are generally not high. However, due to regular and quantitative purchases, polyester factories have better control over inventories than in previous years.
According to the statistics of Silkdu.com, the overall inventory of the polyester market is now concentrated in 18-28 days; in terms of specific products, POY inventory is around 20-28 days, FDY inventory is around 18-27 days, and DTY inventory is around 18-28 days. About 16-27 days.
But with the increase in production, is the inventory facing a certain crisis? The answer is yes. At present, the polyester load remains high, currently around 87.9%.
Now that the inventory pressure is low, we are just trying to reach a balance point. The increase in production capacity will shift the balance to a certain stage. Due to the sluggish production and sales, the gradually high inventory will become higher and higher without any relief.
Weaving stocks high
Since the beginning of this year, the vast majority of weaving manufacturers have been in a state of extremely uneven production and sales. The slow recovery of demand and insufficient follow-up of orders have led many weaving manufacturers to start reducing their burdens and production at the beginning of the year.
The order situation has only improved partially. The overall market trend is still unclear. Conventional products are unsaleable, the market has no bright spot to support it, and it is difficult to ship products, resulting in continuous accumulation of weaving inventory.
According to current statistics, the inventory of weaving gray fabrics is 36.1 days. Judging from the current market conditions, domestic trade competition is fierce and foreign trade recovery is difficult. Weaving manufacturers will continue to accumulate inventory.
In the same period in 2018, it was only about 25 days, which is a normal inventory status. And since it is now mid-August, substantial changes in the market in the later period will affect the actions of manufacturers.
In the absence of favorable conditions for all parties, the resumption of production of the polyester plant will undoubtedly be a heavier blow to polyester products. After the support of the cost end is withdrawn, the downward trend of polyester product prices cannot be avoided, and polyester filaments cannot be avoided. exception.
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