With the epidemic under control, the resumption of work by enterprises in late February will be the new focus of governments at all levels. The polyester industry chain is also ready, except for demand.
The recovery of terminal demand is better than expected, and the textile market will improve significantly this week
The Shengze China Oriental Market officially opened on February 21st. Keqiao also issued a resumption announcement saying that the China Textile City Market officially resumed on February 18th and implemented flexible operations. The business hours are 10:00- 16:00. According to research, local companies in Shaoxing, Wenzhou, Jiaxing and other places will resume work no earlier than February 17; the first batch of water-jet, circular knitting and warp knitting companies in Shaoxing, Haining and Xiaoshan currently plan to return to the market in the third week of February. Printing and dyeing companies in Jiangsu generally resume work around March. Most textile companies in Jiangsu’s Shengze, Changshu and Taicang areas plan to resume work one after another after February 17-21. Fujian Quanzhou circular knitting machines and Youxi warp knitting enterprises initially plan to resume work one after another after February 17. Circular knitting machines and warp knitting factories in Jieyang, Guangdong plan to return to the market one after another after February 21.
For the end market, the main problems in resuming work include: employees fail to arrive at work in time, employees need to be quarantined after their return, and quarantine conditions are required. Resumption of work requires a large amount of epidemic prevention consumables, and operations The place is not conducive to ventilation, upstream and downstream logistics are not completely smooth, and terminal purchase demand is insufficient. Last week we could see that through various measures implemented by Jiangsu and Zhejiang provinces, the number of reworkers increased significantly in the second half of the week compared with the first half of the week, but it is expected that it will still take more time for terminal construction to fully resume.
According to the recovery situation of China Textile City in the three days since the opening of the market, although in absolute terms there is still a big gap with the daily level before the holiday, the speed of recovery is still Exhilarating. In the first week of rework during the Spring Festival in 2019, the trading volume remained at a level of about 1 million meters for about a week. The trading volumes at the opening of this week were: 650,000 meters, 970,000 meters, and 990,000 meters, which have been maintained at similar levels to last year.
In the wave of resumption of work, various regions in Zhejiang have introduced preferential policies, and the “salks” for reworkers are getting higher and higher. On February 9, the Hangzhou Municipal Party Committee and Municipal Government issued the “About Strict Epidemic Prevention and Control to Help Enterprises Resume Work and Production” “Several Policies on Resumption of Work and Production”, the Ningbo Municipal Party Committee and the Municipal Government jointly issued “Several Opinions on Promoting the Resumption of Work and Production of Enterprises” on February 16, Huzhou City issued “Opinions on Subsidies and Rewards for the Resumption of Work and Production of Enterprises” on February 16, Taizhou, Jinhua and Yiwu have also successively introduced preferential treatment policies for reworkers. This week, Hangzhou, Nanjing and other places also gave priority to opening outdoor parks and tourist attractions. While strictly controlling the epidemic, they are committed to resuming production and residents’ daily life. Under such a situation, the pace of resumption of work next week is expected to be greatly accelerated.
In addition, the control and development of the epidemic are still better than expected. If there are no new cases for 14 consecutive days, the epidemic can be judged to be lifted. With the exception of Hubei Province, new cases in other parts of the country continue to decline. In addition to the “prison” cluster infection incident that broke out on the 21st (it is still believed that this cluster incident will not have an impact on the number of social infections), many areas have begun to see “zero new infections”, and the number of new infections in most areas has also dropped to single digits. After a long period of “isolation” and “staying at home”, we believe that the demand for terminal retail may usher in explosive growth in the period after the epidemic is over.
The decline in polyester prices may not be as pessimistic as expected!
Judging from the current start-up data, the start-up of terminals did not see substantial improvement last week. The load of the weaving industry is still below 10%, which directly leads to the decline of the entire industry. Chains are greatly accumulating inventory, which has also become the main reason why the market is generally bearish on polyester filament. However, the editor feels that there is room for the price of polyester filament to fall, but there is no need to be too pessimistic. On the contrary, if there is more positive news than expected or some other positive information, such as accelerated terminal recovery, rising crude oil prices, early end to the epidemic, etc., the acceleration of price stabilization should be great. However, high inventory is an indisputable fact, and in a short period of time Even if the supply and demand relationship of polyester filament improves, it is unlikely that there will be a significant destocking.
1. Raw material inventories of textile mills remained low before the Spring Festival
Before the Spring Festival, raw material inventories of textile mills invariably remained low. According to feedback from enterprises in Shandong, Henan, Tianjin and other places, the raw material inventory of large enterprises generally lasts about 30 days, while that of small and medium-sized enterprises maintains it for 15-20 days, with some individuals only having more than 10 days. I originally thought that there would be no need to worry about the supply of raw materials after the Spring Festival, but an epidemic disrupted the original arrangements of all companies.
On the 20th, the person in charge of a textile company in Dezhou, Shandong Province said that the factory plans to resume full production in late February, and the biggest concern is the “interruption” of raw materials. At present, logistics is not smooth in various places, and we are not sure when the purchased resources will arrive at the factory. And some companies that have resumed production are patching things together to solve the problem of raw materials.
Many business owners believe that the original intention of promoting the orderly resumption of work and production in phases and batches is a good one, and it is completely correct in terms of the laws of epidemic prevention and control. However, this also brings about the problem of incomplete industrial chain and poor connection between upstream and downstream. The company hopes this issue will be resolved as soon as possible.
2. The start-up load of polyester will not rebound quickly in the short term
The inventory of polyester is likely to have reached its highest point last week. This week, with the pace of terminal resumption of work, Speed up, �The inflection point for esters may come. In late February, the overall polyester inventory was relatively high, and the polyester operating load was around 63%. Under the pressure of destocking, the operating load of polyester factories will not pick up quickly. However, among the currently suspended polyester companies, 94% of the production capacity has restarted. The time is still to be determined. We expect that this part of the production capacity will gradually recover after the inventory pressure of polyester is relieved. It is speculated that the start-up load of polyester in late February may be around 65%-70%.
On the one hand, companies are eager to resume work, and on the other hand, there are practical difficulties. Where will companies go? For now, all we can do is wait. The first is to wait for the overall victory of the epidemic prevention and control; the second is to wait for the industrial chain to recover as soon as possible so that enterprises can produce normally.
I would like to say one more thing: Difficulties are temporary. After the rain passes and the sky clears up, it will be a sunny day again. </p
