On September 14th, polyester filament has another double promotion and price reduction:
Tongxiang’s two major major manufacturers have stable prices and preferential promotions;
A POY factory in Xiaoshan has a special promotion;
The price of polyester yarn from a major mainstream factory in Shengze has generally been reduced by 100-200 yuan/ton.
Faced with such a situation, weaving companies expressed calmness and started buying again…
Driven by promotions, the polyester filament market in Jiangsu and Zhejiang regions performs well today. The average production and sales of major mainstream manufacturers almost exceed 100%, and the production and sales of some better factories can reach 300%.
Inventory is too high, polyester factories frequently “enlarge their tactics”
For polyester factories, the frequency of promotions this year is indeed a bit high. The last promotion took place on August 31, which was only two weeks ago.
Affected by the epidemic this year, terminal demand has undergone major changes. The foreign trade market has shrunk sharply, the domestic trade market is not as good as in previous years, and market competition has intensified; on the other hand, 2020 is a gathering year. In a year when ester production capacity has expanded significantly, the layout of leading polyester companies has begun a few years ago, and new equipment is about to be launched. The upstream supply increased and the downstream demand shrank. When the two phases were superimposed, there was a serious excess of polyester production capacity, which eventually resulted in huge inventories.
According to statistics from China Silk Capital Network, the overall inventory of the polyester market is now concentrated at 33-43 days; in terms of specific products, POY inventory is at 11-17 days. FDY inventory is around 22-34 days, while DTY inventory is around 31-43 days.
Promotion can be regarded as the “ancestral trick” of polyester factories. In previous years, it was always in the market It’s too bad. If you have no choice but to use it, you can often achieve some good results. However, judging from this year’s situation, there are a little too many times where “there is no way”.
From the effect point of view, weaving companies are generally quite satisfied with polyester factories. Every promotion can drive a wave of production and sales.
Weaving enterprises: it’s good to save a little
But this It’s just a superficial phenomenon. The actual situation is a little more complicated than this.
For weaving companies, under the influence of the epidemic, whether it is the shrinking number of orders, the rapidly growing inventory of gray fabrics, or the longer and longer receivables cycle, they are all forced to Weaving companies had to break “a penny in half and spend it”.
Buying raw materials is a very expensive thing. Under the current circumstances, it is natural to save as much as possible.
From last year to the first half of this year, the rapidly falling price of polyester yarn caused weaving companies to change their original habit of stockpiling raw materials for several months at a time and instead buy and use them as needed.
This year, polyester factories have started to promote and sell silk every once in a while. This has led some weaving companies to make the choice of “buy silk if there is a promotion, and don’t buy if there is no promotion”. Anyway, there will be promotions every once in a while, and the intervals are not too long, so it is better to take advantage of the promotions and buy more than usual. If you can save a little, it won’t be too much to stock up on raw materials for about a week or two more than usual. By occupying working capital, the money saved in the end is indeed real.
Therefore, we will see that every time there is a promotion, polyester production and sales will suddenly improve, and then as soon as the promotion ends, production and sales will quickly fall back.
This situation has become more and more obvious in the past two months, perhaps because after discovering the promotion rules of polyester factories, more and more weaving companies have adopted similar strategies. .
On the other hand, polyester factories cannot get rid of inventory, and weaving companies are unwilling to stock up on raw materials It is also related to lack of confidence in raw material prices. Judging from what we know so far, the weaving market has indeed improved to a certain extent since September. Domestic trade has basically recovered, and foreign trade orders have also picked up. Not to mention returning to the level of the previous two years, basically production and sales can still be done. flat.
However, in the face of the highest gray fabric inventory in history, it is not enough to just maintain flat production and sales. The recovery speed of the operating rate of weaving enterprises is not as fast as expected. At present, the looms in Jiangsu and Zhejiang regions The operating rate only recovered to about 70%. At the same time, the operating rate of polyester equipment was as high as 92.1%. The operating rate of the loom is so low, but the polyester device is still running as usual, so the extra silk will naturally become inventory.
Editor’s note:In the short term, it is difficult for terminal demand to fundamentally reverse, and the market is still bearish on polyester filament. It will continue. Under such circumstances, it is difficult for the price of polyester yarn to rise significantly. Weaving companies have insufficient funds and have little confidence in the rise of polyester raw materials, so naturally they will not buy large amounts of yarn. Under such circumstances, The phenomenon of frequent promotions in polyester factories may continue for a long time.
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