As the end of the year approaches, for weaving companies, how to collect this year’s receivables may be the most important issue;
For polyester factories, because of their dominant position in the industry chain , so there are many special needs for receivables, but even the leading polyester companies with large industries are not without worries. At least the polyester filament inventory that is about to “break through the sky” is enough to give them a headache.
Warning! Your inventory has “skyrocketed”
For business people, high inventory is definitely a headache. Take ordinary gray fabrics as an example. If the inventory of a weaving factory is too high and it has to maintain a high operating rate due to labor and other reasons. If its goods have no special advantages, then in the market competition, this company’s acceptance will be very difficult. Orders and quotations will become timid.
Although polyester filament yarn manufacturers have more advantages in price negotiation than weaving factories, on the other hand, due to their large businesses, many of them are listed companies, and their requirements for capital chains are also stricter, so The control of inventory is also more focused.
In recent months, the production and sales of polyester factories have remained at a low level below 100 for a long time, even though there have been several short-term convergences due to some favorable factors. The production and sales of ester factories soar, but often the “good days” of high production and sales don’t last long before the benefits are gone, and production and sales fall back below 100 again.
Take a recent example. Because at the G20 Summit in Buenos Aires, Argentina, the heads of state of China and the United States met and reached an agreement to ease trade frictions. Due to this good news, coupled with the news of crude oil production cuts and the replenishment of weaving factories and other factors, the production and sales of polyester factories soared to 400% on December 3, and some companies even closed down and hesitated to sell.
But high production and sales without the support of the downstream weaving market is like “the emperor’s new clothes”, which will be broken at the first prick. The next day, production and sales dropped directly to 130, and then to 120. On Friday (December 7), production and sales fell below 100% again, reaching around 70%.
Under such sluggish production and sales, the production and sales of polyester factories have been rising all the way since September, and by November they had reached the year-end Although it has fallen slightly recently due to the good news from the G20 summit, it still remains high. As the benefits of the G20 have been exhausted, production and sales have fallen again, and a new round of inventory clearance operations is imminent.
In order to reduce inventory, polyester factories are also working hard
Recent news shows that polyester factories have a new The voice of reducing production and burden. The news has not been confirmed yet, but reducing production is a common method when inventory is high. I believe cloth bosses should also be mentally prepared for this.
In addition to the planned production reduction and load reduction measures, polyester factories have also Another method adopted is also worthy of attention.
After the G20 Summit, coupled with the expected reduction in international crude oil production, starting from last Monday (December 3), the entire polyester industry chain rose in response, and the single-day production and sales of polyester filament exploded. 400%, PTA rose by 5% in a single day, and ethylene glycol’s daily limit all occurred one after another during that period.
However, as Trump tweeted to suppress oil prices, international oil prices began to fall. Therefore, starting from this week, the entire polyester industry chain began a periodic correction. PTA futures have fallen for two consecutive days, and ethylene glycol futures have fallen by more than 5% on the day they were launched. However, under this background, the price of polyester filament remains strong, and some manufacturers even have an increase of 50-100 yuan/ton. .
Polyester factories have begun to raise prices, and the reasons for raising prices are relatively intuitive. Buying up rather than buying down is the mentality of most people. Polyester factories hope to increase prices to promote the sales of polyester filament, thereby achieving the purpose of destocking. However, judging from the production and sales in the past two days, the effect is not obvious.
Can the “tried and true” production reduction achieve the desired effect?
In the past two years, production reduction has become a common tactic for polyester factories. If the price is low, production will be reduced; if inventory is high, production will be reduced; if profits are not good, production will be reduced. Because the polyester leader has continued to have a say in the past two years, and the situation in the weaving market is indeed not bad, this trick has been tried and tested. The industry complains about this phenomenon as “price increases as soon as a meeting begins.”
But this year, the tried and tested strategy of reducing production has failed.effect. In November, as the price of the polyester industry chain fell across the board and the production and sales of polyester filament continued to be sluggish, the polyester factory began a round of production reduction measures. At that time, the production capacity involved was 2,500 tons/day. However, not long after the production reduction, Trump tweeted that he would suppress crude oil prices. Crude oil prices fell in response, and then PX fell, PTA fell, and the polyester filament production cut this time also meant that “the business was not halfway started but collapsed in the middle.” “Death”.
Therefore, the author still has reservations about the effect of the possible new round of polyester factory production cuts, which may have an effect in a short time. It has a certain boosting effect, but if we really want to completely reverse the situation by cutting production, we still think too much. After all, it is still the same sentence as before:
High production and sales without the support of the downstream weaving market are like “the emperor’s new clothes”, which will be broken as soon as they are poked.
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