In previous years, upstream costs in the polyester yarn market have increased, which has driven polyester sales. However, this year is much different than in previous years. What caused the polyester market to slump? The answer lies not only in the general downturn in downstream products but also in the lower cost of raw materials. Affected by the bearish macro outlook this year, the performance of weaving end products has been weak, which has dragged down raw materials to a certain extent.
Recently, the polyester market is facing a drop in production and sales, and the enthusiasm of downstream manufacturers to follow up has gradually faded. The lack of cost aspects of upstream polyester raw materials will also promote the sales of polyester filament. The effect gradually weakens. Faced with both declining costs and demand, how long will the decline in the polyester market continue?
Raw materials and weaving inventories have doubled, and fabric orders continue to be received Deterioration
Looking back at the domestic filament weaving market since this month, the overall situation is gradually deteriorating. Let’s take a preliminary look at the performance of the entire market through two data charts monitored by China Silk City Network.
The trend chart of raw material inventory of polyester factories in Jiangsu and Zhejiang regions monitored by China Silk Capital Network We can see that in terms of inventory, due to the recent unsatisfactory overall production and sales performance of the polyester market, the inventory of mainstream manufacturers has increased significantly. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated in 16-24 days, which has basically returned to the high inventory level in March; in terms of specific products, POY inventory is concentrated in 8-13 days, and FDY inventory to around 14-19 days, while DTY inventory is around 24-30 days.
In addition, we can see from the monitoring chart of the inventory of weaving enterprises in Shengze market that the inventory of weaving enterprises has increased significantly in the near future, from around one month to the current around 39 days. The inventory level is currently at an alert level.
The recent delivery situation of fabrics from dyeing factories Judging from the feedback, the market situation continues to fall compared with last week, and the current delivery time is at a low of about 7 days. Generally speaking, orders in the fabric and printing and dyeing markets have been dominated by “small batches and multiple batches”, and market confidence is obviously insufficient.
From the above situation, it can be seen that the inventory of raw materials in the market and the gray cloth market Inventories have all increased. In April, raw material inventories could still be transferred to weaving, but in May, both raw material and weaving inventories rose. When raw material inventories can no longer be transferred to weaving, what will happen next?
The current situation of “not having enough to eat” in the polyester industry chain is becoming increasingly prominent
As the off-season market further deepens, both the fabric and printing and dyeing markets will face the pressure of rising costs and shrinking demand. The current situation of the polyester industry chain’s “not having enough to eat” is increasingly prominent.
Currently, it is understood that due to the recent side effects of the sharp rise and fall of raw materials last year and the recent filament Against the backdrop of continued price decline, weaving procurement has become less popular. As a result, companies in the polyester raw material sector have a strong desire to lower product prices to transfer inventory, and they are all under great pressure from rising inventories. However, the effect of such promotional methods has not been obvious recently. Because there is currently a gap in the price between each upstream and downstream, and it cannot be effectively connected, the author believes that due to the decline in the cost of polyester raw material products, there is still room for polyester yarn to fall in the short term.
While upstream raw material prices are expected to fall, the “flaw” in demand has made It is difficult to restore the balance between production and sales of polyester products, and the price decline may extend to the terminal weaving market. The current sales situation is still difficult to open, and there are few products for sale, especially conventional fabrics such as polyester taffeta and polyester polyester, which occupy a large market share. Sales are even more difficult, which has led to rising inventories of weaving companies. In fact, raw material inventories have been transferred to weaving companies in April. At present, both raw material and weaving inventories have risen in May, and downstream consumers have little desire to purchase raw materials. Raw material inventories can no longer be passed on to weaving. The author predicts that the inventory increase will increase day by day.
The phenomenon of polyester factories and weaving companies reducing their operating hours will be affected by The recent stage has ushered in high frequency
With increasing inventory, fruitless promotions, and lack of orders, polyester factories and weaving companies are bound to Ushered in a double drop in operating rates.
From a cost perspective, the market for polyester raw material products has fallen sharply recently, and the impact on polyester products The profits have eased slightly, but we can also see that even based on the current price of polyester raw materials, the production of polyester series products is difficult to maintain good cash flow. It can be seen that in the short term, polyester factories will still be hovering between profits and production and sales. At present, the polyester factory has started equipment maintenance in the near future, but according to statistics,��, most of them are polyester factories with small planned production capacity. Leading polyester companies have not yet taken any action to reduce or suspend production. If the inventory of large factories rises to a high level in the future, a larger area of polyester load reduction is bound to happen.
In addition, since May, the weaving sector has been bleak, and manufacturers generally said that business has been going ” Downhill”. It is reported that the operating load of looms in Shengze area has shown a downward trend. In fact, on the one hand, the market is about to enter the off-season in the middle of the year, and downstream demand itself is not strong; on the other hand, factors such as the fierce international situation and unsmooth domestic and foreign sales are also restricting the performance of the textile market. Under this circumstance, the prosperity of the downstream weaving industry is naturally not as good as before. The current overall market operation rate is weak, and the operation rate of looms in various places is declining. The current operation rate of water-jet and air-jet looms in Shengze area remains at 7 -80% or so, and the trend is also declining. The declining operating rate of weaving enterprises has naturally greatly reduced the demand for raw materials, which also fundamentally suppresses the room for rising product prices.
In summary, the continued negative impact of polyester raw materials has caused polyester products with sluggish demand Exhausted and faced with rising inventories, filament weaving factories have fallen into a dilemma. But to make matters worse, “black swans” are flying frequently in the market: additional tariffs imposed by the United States, depreciation of the RMB, overcapacity in the market… The negative factors in the textile environment are also increasing. When market demand is insufficient to support the market, how to resolve the pressure from inventory and profits has given filament weaving factories a big problem!
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