Recently, the biggest news for textile people should be the production cuts and promotions of polyester companies. Recently, 13 polyester factories announced their production reduction and shutdown plans, involving nearly 3 million tons of production capacity, causing an uproar in the market.
While announcing the production reduction plan, the polyester factory also launched a large-scale As for promotional methods, some polyester factories even offer promotions as high as 500 yuan/ton, which can be said to be unprecedented.
Sure enough, under such a large promotion effort, some weaving companies that said “it is impossible to buy silk” some time ago said that “it smells really good” and reopened the “buy, buy, buy” “model.
On July 8, the polyester filament market performance in Jiangsu and Zhejiang regions recovered. The average production and sales of mainstream manufacturers were between 130% and 150%, and the production and sales of some better factories could reach 200%, a change from mid-to-late June. decline since then.
On July 9, polyester production and sales were also close to 100%, which was a significant improvement compared with some time ago.
The editor also asked A familiar friend who owns a weaving factory said he would never stock up on raw materials before, but this time he still stocked up on polyester filament for half a month. He said: “It’s not that I want to buy it, it’s just that the silk is cheap. Too many!”
Polyester “driven crazy” by inventory Enterprises
Such a large-scale production reduction and such a large-scale promotion are ultimately because the inventory is too high. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 27-36 days; in terms of specific products, POY inventory is around 8-13 days, FDY inventory is around 19-26 days, and DTY inventory is around 19-26 days. to about 27-38 days.
This kind of inventory is already close to the high level during the year and is still growing.
Downstream demand is also a very Important factor. Due to the risk of a second outbreak of the overseas new coronavirus epidemic, the recovery of the foreign trade market is not as good as expected, and there are not many orders in the market. As the off-season continues to deepen, the average operating rate of looms in Jiangsu and Zhejiang has dropped to about 60-70%.
The loom operating rate is low, and the demand for polyester yarn will naturally be reduced. If polyester companies do not choose to reduce production, even if the promotion makes some weaving companies buy silk impulsively, the indicators will not be the same after all. Treating the root cause, if terminal demand cannot increase, it is equivalent to transferring the pressure to the weaving end, which is not a long-term solution.
Therefore, only by cooperating with promotion and production reduction can inventory be effectively controlled, and both are indispensable.
A big factory that “does not take the usual path”
But we also It can be seen that while a large number of polyester factories have announced plans to reduce production and suspend production, in conjunction with their unprecedented promotion efforts, some large manufacturers have begun to do the opposite. Not only do they not reduce production, but they also put into operation new production capacity.
On July 6, 2020, the groundbreaking ceremony for the third phase of Hengli (Nantong) Industrial Park was held, marking the The third phase of the project officially started. It is understood that the project has an investment of 30 billion yuan and a planned land area of 4,000 acres. It plans to build production lines for special new elastic fibers, environmentally friendly recycled fibers, green multifunctional modified fibers, matt and anti-UV fibers, and composite deformed fibers. Once fully completed and reached capacity, it will have a total production capacity of 3.3 million tons of polyester fiber and an annual processing capacity of 1 million tons of textured yarn, with an estimated annual revenue of 70 billion yuan.
Everyone knows Hengli, a Fortune 500 company and a leading polyester company, is very powerful. Under the epidemic, most companies are thinking about how to shrink production capacity, but leading companies have different considerations. What they are considering is to seize this opportunity when everyone is starting to shrink to increase production capacity, increase market share, and expand their voice.
In addition, we have seen that Hengli’s products put into production this time are mainly based on various differentiated fibers. When the production capacity of ordinary polyester fibers has begun to be excessive, who can seize the differentiation? Whoever takes the lead will dominate the next market.
Afterword
The second half of the year is a year of coexistence of production reduction and production. When the traditional chemical fiber industry has overcapacity, polyester leaders have launched new products. On the one hand, it is to expand its own voice, and on the other hand, it is to shift part of its production capacity to differentiation and take the lead in future competition.
As far as polyester prices are concerned, Even if there are some production reduction measures, the overcapacity situation is still difficult to alleviate when terminal demand is difficult to recover. The editor judges that the decline in polyester filament yarns will slow down in the short term, but in the long term, the sharp rise will The possibility is still unlikely.
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