Introduction: Public health incidents at home and abroad are still fermenting. Residents’ demand for non-necessities such as clothing and home textiles continues to decline. Clothing and textile orders at home and abroad are decreasing day by day. Early orders are gradually being delivered, and subsequent orders are out of stock. Textile companies are struggling, and As a textile raw material, polyester filament is also facing the dilemma of high production and high inventory. The contradiction between supply and demand is highlighted, and expectations for reductions are intensifying.
According to convention, summer is mostly the off-season for polyester filament demand, and corporate inventories will also reach a high point during the year. , affected by public health events this year, polyester filament yarn inventory has reached the high point of the year at the end of the first quarter and the beginning of the second quarter. In the second quarter, a series of measures such as cost-side boosts and corporate preferential promotions have caused polyester filament inventory to drop significantly.
However, since the third quarter, as the temperature gradually rises, the inventory pressure of polyester filament companies continues to increase, and the downstream texturing, weaving, printing and dyeing industries have heard that some companies have stopped for holidays. According to the plan, it is currently understood that individual weaving, printing and dyeing enterprises in Shaoxing have started summer vacation mode.
Figure 1 Inventory comparison of mainstream polyester filament models in 2019-2020:
Source: Longzhong Information
Most textile printing and dyeing companies have replenished autumn and winter fabric raw materials in advance at the end of the second quarter. Since July, corporate orders have been out of stock, and cost inventories, raw materials Inventory levels are on the high side, and some companies’ inventory levels have reached the highest level in recent years. Companies are not willing to continue stocking up, and polyester filament companies are also facing a shortage of orders.
Figure 2 Polyester filament industry start-up trend in 2019-2020:
Source: Longzhong Information
As shown in the figure above, although the current start-up of the polyester filament industry is lower than the level in 2019, in view of the current demand dilemma, polyester filament Industry operations are at a relatively high level, and supply pressure is prominent. Although some polyester filament companies have started load reduction mode since July, domestic leading companies have no clear intention to reduce production and reduce load. Therefore, partial load reduction is a drop in the bucket. The current industry operation rate remains above 85%. In this situation of high inventory and high production, and the proportion of burden reduction is less than 10%, companies often choose the profit-sharing promotion model.
Figure 3 Cash flow trend of polyester filament POY150D/48F in Jiangsu and Zhejiang regions from 2019 to 2020:
Source: Longzhong Information
As shown in Figure 3, since the end of the second quarter, the price of domestic polyester filament has continued to decline, and since the third quarter, the price of polyester filament has The cash flow of most varieties is at a loss. Taking POY150D/48F as an example, the cash flow remained at around 300 yuan/ton in mid-June. The cash flow continued to narrow after the end of June, and the cash flow was at a loss in July. As of press time The cash flow loss is more than 400 yuan/ton.
It is understood that the total retail sales of clothing, shoes, hats, and knitted textiles nationwide in June was 105.9 billion yuan, a decrease of 0.1% compared with the same period last year. From January to June, the national retail sales of clothing, shoes, hats, and textiles The total retail sales of knitted textile products was 512 billion yuan, a decrease of 19.6% compared with the same period. However, the export situation in terminal areas such as clothing, home textiles, shoes and hats is not optimistic.
Many American fashion apparel brands have canceled orders for autumn and winter. Among them, American sports giant Nike said it has About 30% of factory orders have been canceled before the autumn and year-end shopping seasons. American fashion luxury goods group Ralph Lauren said it has canceled about two-thirds of autumn orders.
The double drop in domestic and foreign trade orders has further intensified the contradiction between supply and demand of textile raw materials such as polyester filament, and downstream weaving, etc. Enterprises in the field are increasingly willing to reduce production, reduce burdens, and take holidays, but polyester filament enterprises are still holding on. At present, rumors about polyester filament companies reducing their burden are gradually increasing in the industry, and industry insiders are always paying attention to the situation of enterprises reducing production and reducing their burden.
It is understood that some polyester filament companies currently have certain expectations of reducing production, but have not announced the specific implementation time. As for the scale of production reduction and burden reduction, most companies are still in a wait-and-see period, and will follow up on demand and inventory conditions to consider production reductions. Therefore, in the short term, the polyester filament production rate will remain high.
The current trend of raw materials PTA and ethylene glycol is relatively strong, giving certain support to the polyester filament market, while polyester filament is high Load operation also supports the trend of raw material prices to a certain extent, and the two support each other. If the load reduction process and scale expansion of polyester filament and even the entire polyester variety are too fast, it is very likely to lead to the collapse of the entire industry.
Therefore, polyester filament companies may delay the process of reducing burdens, and the industry’s operating start-up will still be above 80% in July. </p
