Is the polyester market also ushering in a mid-year sales? Yesterday (June 26), some polyester factories lowered the price of polyester filament by around 200-250 yuan/ton. This move also led to a partial recovery in production and sales that day, with average production and sales reporting 194.7%.
Since the beginning of this year, even though the downstream market has not reached the expected peak season, the overall polyester price has been relatively strong. Although there have been ups and downs, the overall price has remained stable.
The reason is that the cost-side support is relatively sufficient. However, as the traditional off-season deepens, the market takes a sharp turn, and the polyester factory finally cannot hold on?
Inventories are gradually rising
Since the beginning of this year, polyester factories have been able to keep prices strong. In addition to cost support, maintaining dynamic and stable inventory also plays a key role.
After the start of the new year, although the textile market has not returned to the expected peak season, market orders are obviously much hotter than in previous years. But why is the market bad?
Mostly because of low profits, the textile market has gradually entered a price-only vicious circle under the pressure of customers lowering prices and competition from peers. Whoever has the lower price will be easier to sell.
In other words, the polyester yarn sold by the polyester factory is actually quite good, and at least the monthly production and sales tasks can be completed, but! The premise is that the textile market is active. As the off-season market deepens, it is not difficult to foresee high polyester stocks.
The load remains high
Despite the expectation that polyester stocks will be overstocked, the polyester load remains high. According to statistics, we can see that as of last Friday, the polyester load was around 87.4%.
According to statistics, the weaving start-up rate during the same period was 71.3%. By comparison, it can be seen that the current polyester load is much higher than the downstream weaving start-up rate. Although the polyester inventory risk is now controllable, as the temperature rises, the weaving start-up rate will decrease. There are also expectations for a decline.
The height difference here further increases the risk of polyester accumulation. After all, the so-called production and sales are the ratio of production and sales. If there is more production and less demand, production and sales will be lower.
Judging from the data of Silkdu.com, the overall inventory of the polyester market is now concentrated between 17-27 days; in terms of specific products, POY inventory is around 19-27 days, FDY inventory is around 17-26 days, and DTY inventory is around 17-27 days. About 15-26 days.
Polyester continues to bottom out
As mentioned above, the sluggish market conditions have led to expectations of higher polyester inventories. Polyester factories are also looking for ways to destock, and the most direct way is to promote sales.
Price cuts are the best way to stimulate downstream buyers. Since June, polyester factories have repeatedly sought new lows for the year. It can be seen from the price curve that this process is not over, but is proceeding steadily.
Under such circumstances, what weaving companies are most concerned about is when will the bottoming end? From a simple analysis, it can be seen that the motivation for polyester factory promotions is to clear inventory. From the perspective of production and sales performance, promotions can still drive purchasing sentiment.
The key to stopping prices from falling is inventory. As long as the inventory is within a reasonable range, the polyester factory will maintain proper and stable operation, and when the inventory is high, it will promote sales.
Therefore, it should be possible to see polyester factories continue to promote polyester yarns on a large scale like this. Weaving companies that need to replenish their stocks can seize the opportunity. Of course, whether to buy or not should also consider their own business conditions and act within their capabilities. .
However, promotional destocking is ultimately a temporary solution rather than a permanent solution. To truly raise prices or reduce inventories, there are only two possibilities: expanding the scale of production cuts and improving terminal market conditions.
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