According to previous years’ experience, rising prices of upstream raw materials can drive up polyester prices and induce shipments of some gray fabrics, but recently this method has failed!
In recent years, manufacturers have more or less holidays before holidays or at the end of the month. There are stockpiling operations, but the Dragon Boat Festival holiday falls at the end of the month, and manufacturers are extremely unmotivated to restock. Except for the strong sales of POY products driven by the promotion of polyester manufacturers, the production and sales of other products performed generally. The production and sales exceeded 100 for only one day, which can even be described as “barely”.
Generally speaking, the periodic consumption demand for polyester filament and polyester is determined by the terminal Seasonal cycle consumption and the loom operating rate of downstream weaving factories are determined. When the start-up load of downstream looms shows an obvious upward trend, it will inevitably lead to an increase in raw material consumption. At the same time, in most cases, in order to maintain production continuity and stable order delivery periods, weaving companies will stock up in advance to ensure continuous supply of raw materials. Correspondingly, polyester filament yarns The rigid demand for polyester and polyester will simultaneously show an upward trend.
However, judging from the first half of this year, except for the first quarter of the national resumption of work stage, the start-up of looms and the production and sales of polyester filament showed a Although there is a relatively normal positive correlation, the two do not show a strong correlation in other times. Among them, there are two main interference factors. The abnormal wide rise and fall of upstream raw materials have led to higher cautious risk aversion in the market and terminal Sluggish demand has led to unsmooth bottom-up transmission of the industrial chain.
First of all, from the first point of view, due to the historically low prices of many chemical fiber products in the first half of 2020, the raw material side The ups and downs affect the changes in the demand side of polyester filament by affecting the “speculative” psychology in the downstream. During the Tomb Sweeping Day holiday in early April, weaving companies had light orders and reduced production and load. However, low raw material prices and expectations of a rebound in crude oil triggered huge dips. The production and sales of polyester filament fell sharply when the looms were started, but their production and sales once rose to more than 300%.
Secondly, due to the negative impact of health security incidents on the domestic and global real economy, terminal textile and clothing Consumption shrank severely, resulting in a sharp year-on-year decline in orders from weaving companies. From May to early June, the operating rate of domestic weaving companies showed a gradual improvement trend. However, during this period, the demand for polyester filament fluctuated and the overall performance was poor, mainly due to the decline in early speculative purchases. Raw material stocks are sufficient but terminal orders are low. The increase in loom startups directly accelerates the accumulation rate of finished gray fabrics, which leads to a vicious cycle: Terminal orders are sluggish – weaving factories have “more input and less output” – raw material polyester yarn and gray fabrics are seriously accumulated – squeezing cash. Flow – the start-up load increases and accelerates the accumulation of inventory – the liquidation of funds into inventory weakens the purchasing power – the loom load increases but the demand for polyester filament drops sharply.
At the same time, the textile market has entered the traditional off-season since July. In previous years, this was the time when a weaving company had accumulated inventory of gray fabrics. In the first half of this year, due to the impact of the epidemic, foreign trade exports basically stagnated, and there was already a large amount of inventory backlogged in warehouses.
The boss of Youbu joked that if you don’t have millions of meters of inventory piled up in the warehouse now, you would be embarrassed to tell others that you are in the textile industry.
It can be said that in today’s weaving companies, it is normal for warehouses to be full of inventory. There is still room for piles of cloth in the warehouse, either because business is particularly good, or because The warehouse is bigger than others.
According to data monitoring, the average inventory of gray fabrics in weaving enterprises in Jiangsu and Zhejiang has exceeded 43 days, reaching the highest level during the year.
At the same time, the startup rate is not optimistic and has dropped to less than 70%.
Therefore, under such circumstances, it is not surprising that weaving companies have chosen to reduce production and suspend production. If weaving companies stop producing, they will naturally stop buying yarn. It will be even more difficult to increase the price of polyester yarn. </p
