Do you still remember the production reduction order for polyester factories last week?
Tongkun reduces production by 1,800 tons
Xinfengming reduces production by 1,400 tons
Shenghong reduces production by 400 tons
….
Now that a week has passed since the production reduction order was issued, what will be the consequences of this production reduction order for the weaving industry? What is the impact?
PTA stops falling and rebounds, polyester quotation is stable
PTA futures stopped falling and rebounded. As of November 19, PTA closed at 6574 points, an increase of 0.74% from the previous day. Downstream polyester factories have a strong desire to stabilize prices. The convening of production reduction activities has also made a wave of remedies for the continued low price of polyester. On November 15, polyester production and sales reached 180%, which was a sudden increase in production and sales when polyester production and sales continued to be sluggish. There are signs of growth, and some companies are making purchases.
Currently, according to data from China Silk City Network, POY Inventory has dropped to 14.3 days, FDY inventory has returned to around 13 days, while DTY inventory has dropped to around 25 days, and polyester inventory has shown a downward trend.
The polyester production reduction has had a certain follow-up impact on weaving enterprises. There was a sudden recovery in production and sales for a period of time, but it was short-lived. On November 19, the overall production and sales of polyester yarn in Jiangsu and Zhejiang were average, with an average estimate of about 70% by around 3 p.m. The reason for this phenomenon is that on the one hand, weaving companies are currently focusing on destocking; on the other hand, the market is also weak due to the warm winter!
Weaving manufacturers have entered a state of excessive inventory
However, the sales situation of gray fabrics in the downstream weaving market is not optimistic. The company has entered the stage of accumulated inventory, and the market is not moving smoothly. According to data from China Silk City Network, the current gray fabric weaving inventory in Shengze area is 33 days. It can be seen that the output of downstream weaving companies is gradually increasing, but the shipping speed cannot keep up with the production speed, making it difficult to balance production and sales.
Mr. Ding from Wujiang Fengxing Textile told the editor: “Now our factory has quite a lot of inventory. The goods are not in good condition, so our focus is on the sales of gray fabrics, and the polyester yarn is replenished as needed.”
At present, the main task of weaving enterprises is to destock, and the same is true for the purchase of polyester yarn. Let’s put it aside for now. It is understood that some market participants hope to clear more inventory before the arrival of 2019 to facilitate capital turnover, clear the accounts that need to be cleared, and then wait for the New Year.
Affected by the warm winter, the market purchasing power is not strong
Based on the performance of the above-mentioned upstream and downstream, the editor understands that “warm winter” is also a big reason. Although it is now entering the end of November, the temperature has not dropped sharply. People are interested in warm clothing in autumn and winter. The demand for fabrics is not large, and many market professionals have predicted that this year will be a warm winter; due to the warm winter, clothing companies are even more cautious about purchasing goods. The direct impact of the reduction in demand on the weaving industry is that goods cannot be moved, and clothing companies cannot They all came to purchase.
On the other hand, as a link in the textile industry chain, the weaving industry will be difficult to become independent without sudden reductions in production capacity, significant increases in demand, and policy support. Faced with these inventories, companies can only rely on companies to find ways to digest them. Inventories accumulate and new orders are slowly placed, which leads to a relatively weak weaving market.
Conclusion
As for the market outlook, some industry professionals said that most people in the weaving industry currently feel that they are not optimistic. Elastic fabrics, cotton, TR and other fabrics will gradually increase in volume. Now we can only hope that the market will get better soon!
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