Just now! The polyester factory seems to be making big moves again! It is rumored that a new round of joint polyester production cuts has been finalized, from 83% to less than 50%. Once the plan is set, implementation begins immediately. It can be seen that when the polyester load is counted this week, the polyester load will drop significantly. This may be the last stubbornness of the polyester factory before the year.
To talk about the current market situation, let’s first look at a set of macro big data. According to data from the National Bureau of Statistics, in the first three quarters of 2022, the national textile industry and chemical fiber industry capacity utilization rates were 77.6% and 83.3% respectively, both down 2% from the same period last year. It is about 75.5%, but still higher than the 75.5% capacity utilization level of the national industry in the same period. The industrial added value of textile enterprises above designated size nationwide decreased by 0.4% year-on-year, operating income increased by 3.1% year-on-year, and total profits decreased by 23.6% year-on-year.
Polyester prices have hit rock bottom
At the end of the peak season in October, polyester manufacturers continued to lower their polyester yarn quotations in order to stimulate downstream purchases of raw materials. Last week, polyester yarn prices dropped by 600-800 yuan/ton. In early November, there was a price difference of nearly 1,500 yuan/ton compared with early October. Yuan/ton, under such a large promotion, the production and sales of polyester manufacturers have indeed improved slightly, but pay attention! It’s only slightly better! This sudden drop of 1,500 yuan/ton would have caused a crazy buying craze in any year!
As we all know, polyester prices have been tepid this year due to downstream demand, so the overall trend follows the upstream cost side. Now, the support from the upstream is not particularly strong, and the overall trend is in a stable state. Therefore, polyester If factories want to maintain prices, they can only reduce production capacity and improve the relationship between supply and demand.
Polyester stocks have reached their peak
As for whether the production reduction can really improve the relationship between supply and demand, we don’t know now. We still need to see the subsequent market situation. However, judging from the current situation, the inventory of polyester factories has reached its peak. According to statistics from Silkdu.com Judging from the above, the overall inventory of the polyester market is now concentrated at 29-33 days; in terms of specific products, POY inventory is around 29-32 days, FDY inventory is around 23-32 days, and DTY inventory is around 28-32 days.
In the off-season, if the inventory of more than one month is not digested, the Spring Festival holiday will come in less than two months, and there will be no place to sell it. Moreover, the polyester factory cannot completely stop production, so it will continue to accumulate during the Spring Festival. Inventory, maybe after the beginning of next year, polyester factory inventory will be as high as nearly two months. At this time, the gradual reduction of production can achieve the effect of controlling inventory while maintaining prices, which is a double benefit for polyester factories.
It’s hard to be optimistic about the future of the polyester market
In the final analysis, the polyester market depends on whether the demand in the downstream market is sufficient. Judging from the current situation, in the future, the market situation of polyester filament cannot be said to be optimistic. After the peak seasons of the Golden, Nine and Silver Tens, the inventory of gray fabrics in the weaving market is not as good as in previous years. There is still a downward trend, but there is an increase. It can be seen that the peak season that everyone has been expecting this year has indeed not been able to change the current situation of the market, and the terminal clothing market is still in poor condition.
With weak demand, weaving companies’ enthusiasm for production has declined, and they will certainly not be enthusiastic about stocking raw materials. Therefore, even with such a large sale of polyester prices, the procurement strategy of weaving companies is still based on rigid demand. Purchase at your own pace. After all, weaving companies are still facing the problem of inventory pressure on finished gray fabrics that is difficult to alleviate in a short time. Financial pressure is generally high, and it is basically unrealistic to buy large quantities of raw materials at this time.
After all, the big sales at the end of the month have become a normal phenomenon that everyone likes to see, but there is another “reserved program” every month which is the increase after the promotion. This is the magic weapon for polyester factories to keep their prices stable. However, after the peak season, it seems that there is no reason to raise prices. Cutting production to protect prices may be the best way out.
Now at the beginning of the month, weaving companies have purchased the raw materials they need, and the inventory of raw materials is sufficient. Therefore, it is expected that the production and sales of polyester yarn will return to a moderate state in the past half month. In the absence of other favorable support, it is expected that polyester yarn sales will be stable in the short term. Silk prices will continue to run weakly.
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