Polyester factory polyester yarn production and sales, as an important indicator reflecting the weaving market situation, are very concerned by textile people, and the same is true for the editor. After observing the production and sales of polyester in recent times, the editor discovered some unusual phenomena.
The editor found that starting from March 12, the average production and sales of polyester yarn in polyester factories have basically remained at around 40%, with unusually small fluctuations. This This is something that has almost never happened before.
So what exactly does the 40% of production and sales mean? What causes this unusual phenomenon?
What does the 40% production and sales represent? ?
Weaving companies are unwilling to buy it
At the beginning, the editor did not know what 40% of production and sales represented, but when the production and sales have remained almost unchanged at 40%, the situation is very obvious: every time the weaving company uses up the raw materials, it purchases again. Only buy what they need in the short term and use it as they go.
According to data monitoring from China Silk City Network, as of March 20, the operating rate of looms in Shengze has returned to about 80%.
According to the polyester production and sales tracking in 2019, When all looms are running at full capacity, raw material consumption is about 80-90% of polyester production capacity. Today, 40% of production and sales is obviously low. Why is this?
The editor believes that there are two reasons: a small number of weaving companies engaged in bargain-hunting behavior not long ago, so there is no demand for raw materials in the short term; second, the current number of weaving companies is 8 There is a certain “moisture” in the operating rate of Chengdu. Although the machines are turned on so much, the production capacity is not fully reached.
Polyester company failed to destock
Since the second half of 2019, the polyester yarn inventory of polyester companies has become a headache. With the outbreak of the new crown epidemic, weaving The start of business operations has been delayed, and polyester factory inventories have further accumulated.
According to statistics from China Silk Capital Network, as of March 23, the overall inventory of the polyester market was concentrated at 33-44 days; in terms of specific products, among them POY inventory is around 27-34 days, FDY inventory is around 28-35 days, and DTY inventory is around 34-44 days.
The original idea of the polyester factory was to wait for the weaving companies to start operations one after another to slowly reduce the inventory. However, under the influence of low production and sales, the destocking in the short term has basically reached Mission impossible.
What are the reasons for today’s situation? Caused?
Learning from the past is a guide for the future
Starting from 2019, the rule of “buy up and not down” for polyester filament will no longer exist. Will the price of polyester filament rise after the Spring Festival? uncertain! Will the price of polyester products continue to rise after the market releases favorable news? Neither!
From 2019 to the present, many cloth bosses have had the unpleasant experience of “buying bargains until half way up the mountain”. Therefore, in today’s treacherous market conditions, many cloth owners have Buying as you go may be the best strategy for them.
No money
Insufficient funds are also a very important reason. In 2019, there was a popular saying among textile companies: Today I produced two batches of cloth, one batch was piled in the warehouse, and the other batch was piled in the sales department. Although this sentence has a certain meaning of ridicule, it also fully reflects the dilemma of high inventory of gray fabrics in weaving enterprises. By 2020, this high inventory situation of gray fabrics has not eased. A large amount of funds are pressed on the inventory, and even if you want to buy raw materials, you are unable to do so.
The order situation is terrible
The recent situation of foreign trade chargebacks has been widely circulated in the textile circle. The editor also conducted a simple survey for this purpose. Nearly 200 textile companies accepted conducted research. The survey found that 86% of textile companies said they received fewer orders this year than last year, and 76% of foreign trade companies had experienced order chargebacks. When encountering order chargebacks, only 5% of customers would provide compensation.
The epidemic is spreading, and the future market is unpredictable
For textile companies, they have to worry not only about the present, but also about the future. At present, the number of confirmed cases of new coronavirus in the world has exceeded 400,000, and it is still growing rapidly. Dr. Zhang Hongwen said in an interview: The epidemic in Europe may have a small peak next spring, which is likely to last for two years. At present, the epidemic in the United States, Japan and other countries is not being controlled smoothly. For textile companies, if the epidemic in the world’s major textile exporting countries is not controlled, the foreign trade market will not improve.
Polyester yarn continues to maintain 40% production and sales What will be the consequences?
Loss of market confidence
Friends who have been in contact with finance and investment know that although market confidence is not real money, it can really be converted into real money. This principle is the same in the textile industry. of.
Now that the epidemic has become so serious, it is conceivable that the future foreign trade market will inevitably suffer an increasingly serious blow. For textile companies, whether it is receiving orders Or they will become hesitant to expand the scale. No one knows what the textile market will be like after the epidemic, but from now on, we will have to live a hard life in a short time.
Polyester production is discontinued and the industry is reshuffled
If 40% of production and sales continue, it will not be as simple as high inventory for polyester companies. The polyester industry is originally an industry with high investment and long return cycle. In recent years, it is not uncommon for polyester companies to eventually go bankrupt due to the break in the capital chain due to various reasons. Once polyester stocks continue to grow (which seems to be an event that is likely to happen now), on the one hand, some companies may stop production and reduce production to stop losses; on the other hand, some leading polyester companies with sufficient capital chains will take the opportunity to occupy With more markets and expansion of its territory, the polyester industry may undergo a new round of reshuffle.
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