Recently, many polyester factories have expanded the scale of production reductions based on the original production reductions. At the same time, some polyester factories have production reduction plans in the future, involving a production capacity of more than 4.5 million tons. If all are implemented, the polyester load is expected to be It will be reduced by 2-3 percentage points to below 90%.
Polyester production and sales continue to be sluggish
Last week, PTA futures prices suffered significant fluctuations due to financial factors. It was still at the daily limit on Monday and Tuesday, but on Tuesday night trading was suppressed by bad news, and futures reversed course. They fell sharply on both Thursday and Friday, with Friday’s drop exceeding 6%.
PTA is the main raw material for polyester filament, and the dramatic price fluctuations have brought significant negative effects to the production and sales of polyester filament.
Since last Wednesday, polyester production and sales in Jiangsu and Zhejiang have continued to hover around 10-20%. When the trend of raw material prices is unclear and there is a risk of large fluctuations, most weaving companies choose to wait and see. The company’s attitude is that it will only replenish the stock slightly when the inventory of raw materials bottoms out.
Affected by the continued low production and sales, the inventory of polyester factories has risen sharply in recent days, from China Silk Capital Network According to statistical data, the overall inventory of the polyester market has increased slightly to 10-19 days; in terms of specific products, POY inventory has reached 5-9 days, FDY inventory has reached around 10-16 days, and DTY inventory has reached 18-23 days About days.
Weaving enterprises have increased production suspensions and production restrictions
It is still the commonplace topic about production suspension and production restriction. The transfer of water-jet looms has led to excess production capacity of conventional products, and weaving companies have difficulty digesting large inventories.
As time enters the traditional off-season in July, more and more weaving companies choose to limit production to reduce the accumulation rate of inventory and relieve financial pressure.
Judging from the news obtained during the current visit, the early production suspension plans of weaving companies have begun to be implemented, especially in some “old” old factories, because most of the machines are old. The old ones can only produce some “bad cloth” with poor quality. Therefore, some weaving companies took advantage of the suspension of production to start updating their machines and carrying out technological transformation in order to seek stronger competitiveness. This can be regarded as a “bad cloth” in a certain sense. A blessing in disguise.”
In short, it is an established fact that some weaving companies have stopped production and restricted production in July. The demand for raw polyester filament has plummeted, and it is understandable that polyester manufacturers have reduced production.
What do polyester manufacturers want to achieve after reducing production? In fact, it is nothing more than preserving inventory and protecting prices.
Safety Inventory
As mentioned above, due to insufficient production and sales recently, the inventory of polyester factories has plummeted. rise. In the first half of this year, polyester inventories climbed to historical highs, which dealt a huge blow to the profitability of polyester companies. Now terminal weaving companies have begun to limit production during the off-season. If production is not reduced, inventories are likely to rise to historical highs again.
Guaranteed Price
At present, the price of polyester filament has entered a downward channel. Although the decline is not large, The overall trend is lower. In addition to reducing the hidden danger of high inventory, cutting production can also stabilize the current price of polyester yarn. On the other hand, once the downstream market improves, there will be more room for price increases of polyester yarn.
What will be the subsequent impact of polyester production cuts?
PTA equipment may have subsequent reactions
The same is the change in supply and demand. When polyester factories If production is reduced, the demand for PTA will also decrease. Then the only way for PTA is to reduce production. Once the supply of PTA exceeds demand, the accumulation of PTA social inventory will have an adverse impact on subsequent production and operations, which is not in the interests of the “big guys”. Therefore, the author predicts that there may be news about PTA device maintenance in the near future.
Weaving companies have little impact
Recent upstream raw material fluctuations have become increasingly difficult to affect the production of weaving companies Plan, neither the resumption of Sino-US trade negotiations nor the sharp rise and fall of PTA last week has had a huge impact on terminal weaving. As long as the demand for terminal clothing, home textiles, etc. cannot rise, weaving companies have always been lukewarm. It looks like fire, I believe it will be like this again this time.
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