Last week, 13 polyester factories announced their plans to reduce production shutdowns, involving nearly 3 million tons of production capacity. As soon as this news was released, it caused great repercussions in the circle of textile people.
It has been more than half a week since the company released the production reduction news Time has passed, how has the market reacted?
Forced to reduce production
In late June, as the market off-season deepened, more and more weaving companies chose to reduce their own operating rates under the pressure of capital and inventory, and focused on polyester The demand for filament has further decreased, and as a result, the price of polyester filament has begun to decline. Taking polyester FDY50D/24F as an example, the price difference from June 22 to now is as high as 600 yuan/ton.
Affected by this, polyester profits have continued to decline, some products have even turned negative again, and polyester inventories have also continued to increase.
Under such circumstances, the polyester factory started Promotions, but due to the decline in operating rates and the increase in holidays, weaving companies did not buy into the promotions. It was in desperation that the polyester factory chose measures to limit production.
“Production limited”, but There is no “guaranteed price”
The purpose of the polyester factory’s production reduction is to “limit production and guarantee price” and control inventory at the same time, but the final result is a bit counterproductive .
On July 10, the price of polyester yarn from Wujiang Factory No. 1 was reduced by 100-300 yuan. / ton, the price of a large factory in Taicang was reduced by 100 yuan / ton, and the price of polyester yarn from two large factories in Tongxiang was reduced by 200 yuan / ton;
On July 13, The price of polyester filament of most polyester companies remains stable. The price of polyester filament of a POY factory in Xiaoshan has been reduced by 100 yuan/ton, and some polyester factories have chosen to expand preferential measures.
Production and sales have improved slightly. On the 13th, production and sales reached nearly 100%, but The improvement in production and sales has little impact on the first production limit. It is more because the price of polyester yarn has been too cheap recently. In addition, there are many promotional activities. The real “price” is almost comparable to the lowest point in April. .
It can be said that this production reduction will ultimately There is only “limitation of production”, but it does not play the role of “guaranteing price”.
This production reduction action has caused great concern among textile people Despite the turmoil, the final result was unsatisfactory. Why is this?
The thunder of production reduction is loud, but the rain is small span>
First of all, the scale of this production cut is actually not large. Even though 13 polyester companies posted production reduction announcements on the Internet and made a huge noise, the final production capacity involved was only 3 million tons, and these 3 million tons included those that were originally planned to stop production for maintenance, and those that were already undergoing maintenance. That part.
In addition, although polyester filament accounts for the majority of the nearly 3 million tons of production capacity involved, it also includes a large number of polyester chips. , bottle flakes and polyester staple fiber production capacity. If these production capacities are removed, the production capacity related to polyester yarn may be only about half of the 3 million tons.
Finally, not many major factories are participating in this production reduction, and the polyester production capacity of these major factories is even less. “Brother takes the lead” If they don’t take action, the momentum for limiting production and protecting prices will be much smaller.
When I saw the changes in polyester production capacity last week, the editor was shocked. I originally thought that polyester production capacity had dropped a lot, but it turned out that it only dropped from 92 % dropped to 91%.
The fundamentals of terminal demand are too poor
Of course, the more important thing is because The fundamentals of terminal demand are really poor. The scale of my country’s textile industry chain is built in accordance with global export standards, but under the current circumstances, foreign trade has almost stopped.� Domestic demand has still not returned to pre-epidemic levels. In the process of chatting with cloth bosses, most of them said that this year’s sales were less than half of previous years, and traders were even more helpless. Last week, the editor asked a trader who makes imitation silk. He said that this year The number of orders is only one-tenth of last year, and I can only play cards in the sales department.
It is the stagnation of demand that has caused textile companies to accumulate a large amount of inventory. Some weaving companies have tense capital chains. They have inventory but no money. In the end, they can only The choice is to sell inventory at low prices and continue production or temporarily suspend production until the market improves.
Under such market conditions, polyester manufacturers cannot sell their silk, and it is not surprising that “reducing production cannot maintain prices”.
The scale of future production cuts may continue to expand
Inventory is not only a problem for weaving companies, but also a problem for polyester companies. As the epidemic continues to spread, weaving companies have basically made up their mind not to buy large quantities of silk anymore. At this time, if we do not want polyester stocks to “go to the sky”, it is almost a certainty to continue to expand production reduction measures.
However, for weaving companies, the current mainstream method of purchasing raw materials is still purchasing on demand. Under low operating conditions, the production reduction of polyester factories may allow raw materials to be purchased. It will stop the downward trend and play the role of “protecting prices”, but it is still unlikely to increase prices by reducing production.
Therefore, the editor predicts that polyester factories will continue to expand production restriction measures in the future, and when the scale of production reduction is expanded, the price of polyester yarn will also resume its trend. stable.
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